The US Treasury Department said on Wednesday that a sale of MetLife Inc stock by American International Group Inc brought in US$6.3 billion, which will go toward repaying a portion of the taxpayer bailout of the insurance company.
Treasury said that the US$6.3 billion in gross proceeds from the sale would be used to redeem part of the Treasury’s US$18.2 billion investment in preferred equity shares in AIG.
AIG offered 146.8 million shares of its holdings in MetLife for sale and the stock sold at US$43.25 a share.
The MetLife stock sale is part of the government’s effort to wind down its largest and most complex rescue from the 2008 financial crisis, when it assembled a US$182 billion package to save New York-based AIG.
The government owns more than 1.6 billion shares of AIG common stock, giving it a 92 percent stake in the company. The Treasury is expected to start selling those shares this month.
Tim Massad, the Treasury’s acting assistant secretary for financial security, labeled AIG’s sale of its MetLife holdings evidence of a “remarkable turnaround” for AIG.
“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,” Massad said in a statement.
The US$700 billion AIG bailout, which included loans and federal guarantees, was the largest of a series of rescues announced during the stomach-churning weeks in the fall of 2008 at the height of the financial crisis. The Treasury made a total cash investment from its Troubled Asset Relief Program of US$68 billion.
In addition to the MetLife stock sold on Wednesday, the Treasury said US$3 billion in MetLife equity units were also sold.
The Treasury said the proceeds from that sale would remain in an escrow account and be used to pay down the Treasury’s preferred equity interests in the company.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
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