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US seeks to cut AIG stake to below 20%
Source: Agencies |
September 11, 2012, Tuesday
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Print Edition
Print Edition
THE US government is selling more of its shares in insurer American International Group Inc, in a move that should trim its holdings below a majority stake for the first time since the US$182 billion bailout in 2008.
The sale is the latest step to recoup taxpayer money spent on the largest bailout of the financial crisis.
AIG said on Sunday the Treasury Department is selling US$18 billion worth of its common shares to institutions.
If there is more demand, the government will grant the underwriters a 30-day option to buy up to US$2.7 billion more of its stake in the company.
AIG said it will buy back US$5 billion worth. The price is not yet determined.
The move should cut the government's stake in AIG to under 20 percent of the insurer's total outstanding stock. Right now, Treasury holds about 53 percent of the insurer, or over 871 billion shares of common stock, worth about US$30 billion.
The government has reduced its stake from 92 percent of the company, after selling shares four times in the last couple of years for a total of US$23.3 billion. The most recent sale of about US$5 billion was in early August.
New York-based AIG nearly collapsed in 2008. It received US$182 billion from the US government - the biggest of the Wall Street bailout packages - after suffering massive losses from investments in derivatives.
The company has sold off several different units in order to raise money to pay off its debt to the government.
AIG may post a US$7.4 billion net profit in the year through December.
The sale is the latest step to recoup taxpayer money spent on the largest bailout of the financial crisis.
AIG said on Sunday the Treasury Department is selling US$18 billion worth of its common shares to institutions.
If there is more demand, the government will grant the underwriters a 30-day option to buy up to US$2.7 billion more of its stake in the company.
AIG said it will buy back US$5 billion worth. The price is not yet determined.
The move should cut the government's stake in AIG to under 20 percent of the insurer's total outstanding stock. Right now, Treasury holds about 53 percent of the insurer, or over 871 billion shares of common stock, worth about US$30 billion.
The government has reduced its stake from 92 percent of the company, after selling shares four times in the last couple of years for a total of US$23.3 billion. The most recent sale of about US$5 billion was in early August.
New York-based AIG nearly collapsed in 2008. It received US$182 billion from the US government - the biggest of the Wall Street bailout packages - after suffering massive losses from investments in derivatives.
The company has sold off several different units in order to raise money to pay off its debt to the government.
AIG may post a US$7.4 billion net profit in the year through December.
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