Ailing insurance firm, American International Group, will sell its 14 percent stake casualty reinsurer, Transatlantic holdings, as the company continues to struggle to repay taxpayers.
AIG holds stake in Transatlantic beneath its American Home Assurance Co. subsidiary, which will be sold off on March 9 via a public offering of 9.2 million shares. Transatlantic will join the S&P Midcap 400 Index at that time and a percentage of the shares will be allotted for index funds.
This announcement marks the second dramatic measure taken by the insurer of late. Earlier this week, the company made headlines with the $25 billion sale of its Asian life insurance branch to Prudential. The transaction was made in cash with an additional $10.5 billion in securities and stock.
The most recent reports from AIG have been troubling, indicating the insurer is still bogged down by a massive $129.3 billion in Federal loans.
The weight of the debt is heavy on AIG who will have to continue selling businesses in order to lighten the load. In addition to the two most recent transactions, AIG is in the process of selling Alico or American Life Insurance Co. business to MetLife for $15 billion.
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