US Department of the Treasury has said that it will commence an underwritten public offering of approximately 2.4 billion shares of Citigroup common stock that would dispose of its remaining shares of Citigroup common stock.

In July 2009, the Treasury received approximately 7.7 billion shares of Citigroup common stock from the exchange offers for the $25bn in preferred stock received in connection with Citigroup’s participation in the Capital Purchase Program.

According to the treasury, the completion of the offering would depend on whether it receives an acceptable price for the shares.

The exchange was part of exchange offers conducted by Citigroup to strengthen its capital base. Treasury has disposed of approximately 5.3 billion shares to date in at-the-market sales.

If the offering is completed, Treasury would continue to hold warrants for Citigroup’s common stock that were also issued as part of Citigroup’s participation in Treasury programs.

It is also entitled to receive up to $800m in TruPS held by the FDIC that the FDIC is required to turn over to Treasury unless it incurs any losses on debt of Citigroup guaranteed by the FDIC under the Temporary Liquidity Guarantee Program.

Treasury said that the Morgan Stanley will act as bookrunning manager for this offering.