AIG to buy back up to $3 billion stock from the treasury
04 Aug 2012
The bailed-out insurance giant American International Group, Inc (AIG) said yesterday it has agreed to purchase 98,360,656 shares of AIG common stock in the offering at $30.5 per share for an aggregate purchase amount of approximately $3 billion.
The US Treasury Department on Friday sold $5 billion worth of shares in AIG, pruning its stake in the firm just above 50 per cent of its common stock, bringing down the amount the government needs to recoup from the AIG bailout to $25 billion.
Before the sale, Treasury's fourth so far and one that involves nearly 164 million shares of the company, Treasury held 61 per cent of AIG shares outstanding.
The Treasury said the shares were sold at $30.50 apiece, $1.77 above the government's purchase price-per-share of $28.73, meaning taxpayers will earn a profit on the sale.
Since September 2008, the treasury and the Federal Reserve injected over $180 billion in a complicated, multi-step bailout to save the ailing insurer in one of the government's largest investments in the private sector.
According to a report by the Government Accountability Office (GAO), the government could make a profit of $15.1 billion from the bailout of AIG (See: US government could earn $15.1 bn from AIG bailout).
