New York : Citigroup Inc., seeking to restore investor confidence amid massive losses due in credit markets and a lack of permanent leadership, has announced that it will receive $ 7.5 billion from the Abu Dhabi government.

The investment by the Abu Dhabi Investment Authority will help rebuild Citigroup’s capital levels, which have been eroded by a credit crunch that began in August, a media report said on Tuesday.

Citigroup Chief Executive Charles Prince resigned earlier this month after the bank, which had already written off billions of dollars, was facing as much as $ 11 billion more in losses.

As a result of the deal the investment authority known as ADIA will become one of Citigroup’s largest shareholders, with a stake of less than 5 per cent, the Wall Street Journal said.

The stake will exceed that of Saudi Prince Alwaleed bin Talal, long known as one of Citigroup’s largest share holders, it quoted people familiar with the deal as saying.

The investment, the journal added, underscores the growing role that Middle Eastern investors are taking outside their home turf.

Separately on Monday, an investment company owned by Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, bought a stake in Sony Corp., the paper said, adding ADIA, which has almost USD one trillion under management, this summer bought a small stake in Apollo Management LP.

In exchange for its investment, ADIA will receive convertible stock in Citigroup yielding 11 per cent annually. The shares are required to be converted into common stock at a conversion price of a maximum $ 37.24 a share over a period of time between March 2010 and September 2011.

ADIA, which is a client of Citigroup, won’t have any governance rights in the bank, the paper said.