The US Department of the Treasury is to sell US$5 billion worth of American International Group Inc (AIG) shares in a public offering, with the bailed-out insurer buying US$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 on Sunday that it would sell 163,934,426 shares of its AIG common stock at US$30.50 per share in an underwritten public offering — its third such sale since the government intervened.
“The aggregate proceeds to Treasury from the common stock offering are expected to be approximately US$5 billion,” the statement said.
“As part of Treasury’s offering, AIG agreed to purchase 65,573,770 shares at the public offering price of US$30.50 per share — representing US$2 billion of Treasury’s expected proceeds from the sale,” it added.
The offering will reduce the government’s holding in AIG from 70 percent to 63 percent, the Treasury said.
US government assistance for AIG has amounted to more than US$180 billion.