AIG Not to Seek Shareholder Approval in Government Plan
On Friday American International Group Inc (AIG) said that the insurer will not be seeking shareholder approval for a plan to issue convertible preferred shares that will give the U.S. government 79.9 percent stake in the insurer.
Last week AIG signed a definitive agreement to borrow up to $85 billion from the U.S. Federal Reserve, and said its board's audit committee had decided that delaying the deal to seek shareholder approval "would seriously jeopardize the financial viability of AIG."
The audit committee thus cleared the way for the deal to be approved without a shareholder vote, AIG said in a statement. The New York Stock Exchange also approved the move.
AIG, once the world's largest insurer, was forced to seek a government rescue earlier this month after its shares entered a death spiral which led ratings agencies to slash its credit ratings forcing it to post billions of dollars in additional collateral on derivatives contracts it insured.
Published on September 29, 2008
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