NU Online News Service, May 25, 12:34 p.m. EDT
American International Group Inc. (AIG) and the U.S. Department of the Treasury made available 300 million shares priced at $29 per share, which raised about $9 billion.
After the offering the Treasury, which says it expects aggregate gross proceeds of about $5.8 billion, will hold about 1.455 billion shares of AIG common stock to bring its ownership in the bailed-out insurer down to 77 percent.
The Treasury sold 200 million shares and AIG issued and sold 100 million shares.
The Treasury had owned 92 percent of the company after finalizing a recapitalization plan with AIG.
After the stock sale the Treasury's remaining investment in AIG via the Troubled Asset Relief Program (TARP) is $53.1 billion. It also owns about $11.4 billion in preferred shares. Additionally, outstanding loans from the Federal Reserve Bank of New York stand at about $23.6 billion.
The government in 2008 made about $182 billion available to AIG during the financial crisis in order to prevent the company's collapse.
Treasury Secretary Timothy Geithner says the offering of stock "represents an important milestone as we continue to exit our stake in AIG and wind down TARP."
Geithner stood by government assistance during the crisis, saying it was "essential to stopping a financial panic, preventing a severe economic collapse and helping save American jobs."
Reportedly, the Treasury would break even on its investment with a share price of about $28.73. This morning shares of AIG stock were selling at around $28.50. The stock has slid about 50 percent this year.
AIG says it will not pocket any of the proceeds of the sale of its stock by the Treasury, and $550 million will be put toward a July 2010 litigation settlement of a securities class-action lawsuit. Any balance after the sale will be used for "general corporate purposes," AIG says.
AIG had no comment on the so-called "re-IPO."
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