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Report Says Government Planning Two Major Stock Offerings in AIG Next Year

Posted on 21 Dec 2010

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Reuters is reporting that the Treasury Department is planning to sell a large piece of its stake in American International Group (AIG) in two stock offerings in 2011. The sources say that any remaining stock in AIG would be then sold in 2012.

After a recapitalization plan closes by the end of first quarter, and perhaps as soon as December 31, the government will own 92.1 percent of AIG

The sale would mark a major step in getting the government out of its investment in AIG, which received a $182.3 billion bailout package during the financial crisis.

The stock sale will help the government make a profit on the bailout if the offering is roughly $30 per share or higher. The Treasury's stake is worth about $90 billion at the current share price. It spent $49.1 billion for that stake.

The U.S. government has seen strong market appetite for stock in bailed-out companies in the past few months, allowing it to be more aggressive in winding down its stakes in companies like Citigroup and General Motors.