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09-06-2012, 03:31 PM #1
AIG to sell $2 Billion of AIA unit, repay government
AIG to sell $2B of AIA unit, repay government
Updated 3h 29m ago
NEW YORK (AP) – Insurance giant American International Group said Thursday it's selling part of its stake in Asian insurer AIA Group and plans to pay off more of its loans from the U.S. government.
AIG said that proceeds from the sale of up to $2 billion of AIA shares to some big investors will be used for general corporate purposes, including possible stock buybacks. Meanwhile, the insurer's board also approved the buyback of up to $5 billion of shares of its common stock from the U.S. government.
New York-based AIG nearly collapsed in 2008. It received $182 billion from the federal government — the biggest of the Wall Street bailout packages — after suffering massive losses from investments in derivatives.
Four years later, the Treasury Department owns about 53% of AIG stock. It has reduced its stake from 92% by selling shares four times in the past couple of years for a total of $23.3 billion.
AIA used to be part of AIG, but the insurer spun off the Asian division as it worked to pay down its debt to the federal government. AIA's 2010 initial public stock offering in Hong Kong raised $20.5 billion, which AIG used to repay bailout debt. The insurance giant sold an additional $6 billion in AIA shares this March.
AIG shares fell about 1.6% to a little over $34 a share in midday trading. The company's shares, which plunged during the financial crisis, have gained nearly 50% so far this year.
AIG to sell $2B of AIA unit, repay governmentNO AMNESTY
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