WASHINGTON (AP) — American International Group Inc. said Tuesday it is taking another step toward repaying the government's $182 billion bailout package.
The company has reached an agreement with MetLife Inc. to sell more than 78 million MetLife common shares, and it also agreed to sell another 40 million equity units of MetLife valued at $3 billion.
AIG received the securities as part of the $16.2 billion sale of its American Life Insurance Co. subsidiary to MetLife last November. MetLife paid $7.2 billion in cash and the rest in securities for ALICO.
MetLife has agreed to allow AIG to sell the securities earlier than planned. AIG initially promised to hold the securities for at least nine months.
MetLife also said Tuesday that it plans to sell 68.6 million shares in a public offering. It will use proceeds from the sale to repurchase preferred convertible securities owned by AIG. Those securities could be converted to 68.6 million common shares. MetLife will then cancel the securities, rather than convert them.
The government still owns about 90 percent of AIG's shares, which it received in January in return for $47.5 billion in taxpayer aid. Depending on how the shares perform, the government could make a profit on the bailout after it sells the shares. The Treasury Department is expected to start selling its shares this month.
AIG still owes the Treasury Department another $18.2 billion. The company said it will use proceeds from its sale of MetLife shares to reduce the balance on that loan. In January the company repaid $21 billion that it owed the New York Federal Reserve.
The Federal Reserve still holds many of the $50 billion worth of complex derivatives that it took off AIG's books.
MetLife shares fell $1.32, or 2.8 percent, to close at $46.04 Tuesday.
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