AIG’s plan to re­pay bailout is shap­ing up

Los Angeles Times - - Business - reuters

Amer­i­can In­ter­na­tional Group is see­ing plans to free it­self of U.S. govern­ment sup­port start to come to­gether two years af­ter it was bailed out and ex­pects tax­pay­ers to profit from their in­vest­ment.

AIG is close to fi­nal­iz­ing a plan for the govern­ment to sell its stake in the in­surer, which would see the Trea­sury Depart­ment con­vert $49 bil­lion of pre­ferred stock into com­mon shares to be sold over time, Chair­man Steve Miller said Wed­nes­day.

AIG also is close to sell­ing two life in­surance units in Ja­pan to Pru­den­tial Fi­nan­cial Inc. for about $4.8 bil­lion in cash, a source fa­mil­iar with the mat­ter said.

The de­vel­op­ments show AIG is mak­ing sig­nif­i­cant progress in dis­en­tan­gling it­self from the govern­ment, al­though it still has a long way to go be­fore the U.S. tax­pay­ers get paid back in full for their $182.3-bil­lion res­cue pack­age.

An an­nounce­ment of the re­pay­ment plan, which an­other source said could come within days, would also mark a big win on a po­lit­i­cally charged bailout for the govern­ment at a cru­cial time. The $700-bil­lion Trou­bled As­set Re­lief Pro­gram, set up amid the 2008 fi­nan­cial cri­sis, ex­pires Sun­day and the mid-term elec­tions will be held in Novem­ber.

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