Bailed-out insurance giant AIG is expected to repay $6.3 billion to the US Treasury from the sale of its stake in industry rival MetLife, officials said Wednesday.
A Treasury statement said 146.8 million shares of MetLife common stock were sold at $43.25 per share, resulting in $6.3 billion of expected gross proceeds.
The proceeds will be used to pay off another chunk of the record bailout that AIG received during the height of the financial crisis.
AIG obtained the stake last year when its sold its American Life Insurance Company (ALICO) to MetLife for $16.2 billion, including about $7.2 billion in cash.
“This is the next chapter in AIG’s remarkable turnaround,” said Acting Assistant Treasury Secretary for Financial Stability Tim Massad.
“We are optimistic about the prospects that taxpayers will recover every dollar invested in AIG — something that many thought would be impossible when these investments were first made.”
The Treasury said additional shares of MetLife were sold for $3.3 billion. This money will be held in escrow as previously agreed to under the terms of the ALICO sale, and may be used later to repay the Treasury.
The Treasury made a total cash investment in AIG of approximately $68 billion through the Troubled Asset Relief Program (TARP), in addition to loans from the Federal Reserve to keep the key financial firm afloat.
AIG, once the world’s largest insurer, received more than $180 billion dollars from US taxpayers to help cover investments that collapsed amid the crisis. As of February 1, the total outstanding amount of Treasury’s preferred equity interest in AIG was $18.2 billion.
Washington, March 2, 2011 (AFP)
