The U.S. Treasury Department may announce plans as early as this week to return American International Group Inc. to independence and recoup taxpayer money from the insurer’s bailout.
The US government is seeking to dispose of its AIG stake as
Chief Executive Officer Robert Benmosche, 66, prepares divestitures of two
non-U.S. divisions that he said would largely repay the firm’s Federal Reserve
credit line. MetLife Inc. said this month its purchase of American Life
Insurance Co., for about $15.5 billion, is “on track” to be completed on Nov.
1. AIG may hold an initial public offering of another business, AIA Group Ltd.,
in October.
AIG’s plan to gain independence “could result in the
issuance of a large number of additional shares of AIG common stock,” the
company said in the Aug. 6 filing. The new securities “could result in
significant dilution to AIG’s current shareholders,” the firm said.
The government’s exit from AIG could be modeled after that of New York-based Citigroup Inc., in which the government sold shares through a set trading program, Benmosche has said. Citigroup is still 18 percent owned by Treasury.
The insurer’s objective is to “repay the taxpayers and position AIG, over time, as a strong, independent company worthy of investor confidence,” said Mark Herr, a spokesman for the firm. “We have been in discussions with the U.S. Treasury, the Federal Reserve Bank of New York and trustees of the AIG Trust over the terms of the government’s exit from AIG.”
