Citi to sell Redecard stake - Reuters

Citi to sell Redecard stake - Reuters

Citigroup plans to sell its stake in Brazilian credit card company Redecard, "a source with direct knowledge of the plans" has told Reuters, potentially raising $1.27 billion for the troubled US bank.

Citigroup owns 17% of Redecard, which processes MasterCard and Diners Club transactions and has a market value of about 18 billion reais.

Citigroup will likely sell most of the stake in a secondary stock offering, the source told the newswire. Brazil's Itau, which already holds 46.4% of Redecard, is expected to buy a portion of the stake.

In January last year Citi raised 1.06 billion reais when it offloaded a six per cent stake in Redecard.

The move comes ahead of vital stress tests imposed by the Obama administration on the capital of US banks ahead of the release of more bail-out funds. Shares in Citi, and compatriot Bank of America, have nosedived in recent days amid fears that both banks face the prospect of overnight nationalisation.

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