The US Treasury is to sell $5 billion worth of shares in American International Group Inc. (AIG) in a stock offering, with the bailed-out insurer buying $2 billion.
AIG, seen as a symbol of the excesses that epitomized the global financial meltdown in 2008, was saved from almost certain bankruptcy in September that year by the US government.
The Treasury announced in a statement Sunday that it would sell 163,934,426 shares of its AIG common stock at $30.50 per share in an underwritten public offering, its third such sale since the government intervened at the company.
“The aggregate proceeds to Treasury from the common stock offering are expected to be approximately $5.0 billion,” the statement said.
“As part of Treasury’s offering, AIG agreed to purchase 65,573,770 shares at the public offering price of $30.50 per share — representing $2.0 billion of Treasury’s expected proceeds from the sale,” it added.
The offering will reduce the government’s holding in AIG from 70 per cent to 63 per cent, according to the Treasury which first trailed the sale on Friday but without giving details. AIG shares closed at $32.83 on Friday, down 3.84 per cent.
US government assistance for AIG, which in 2008 was swept into a liquidity crisis by its exposure to credit default swaps on mortgage-backed securities, has amounted to more than $180 billion.
Washington, May 7, 2012 (AFP)
