American International Group CEO Bob Benmosche in an interview with CNBC, said that repaying the government is a priority. On the brink of collapse in 2008, AIG received a $184 billion dollars in loans and guarantees from the government. Three years on, the Treasury still holds a 77 percent stake in the company, and AIG owes the New York Fed $6.8 billion dollars. Benmosche’s priorities are unchanged.
Brought in to run the troubled insurer in August 2009, Benmosche has made significant progress in turning it around. He streamlined AIG selling businesses he did not consider core to the firm’s global property and casualty business, Chartis, and its domestic life insurance unit, Sun America.
“My goals are the same,” he said. “I want to make sure AIG pays back the American taxpayer with a profit and that it’s clear if it’s not done, that it’s almost done.”
Achieving this goal will depend a great deal on the stock market. Key to repaying the $6.8 billion is raising cash through an initial public offering ofIFLC Holdings Inc, AIG’s aircraft leasing business, Benmosche said.
Under one scenario being considered, money raised from the IPO could repay the New York Fed and allow AIG to monetize its 33 percent stake in AIA, an Asian life insurer held as collateral against the outstanding loan. Money raised from a potential sale of the AIA stake could then be used to buy back at least a portion of the Treasury’s stake in AIG.
This will not allow the government to sell its whole stake immediately, but by the time Benmosche retires for good, a person close to the firm said AIG expects the government will be a minority, rather than a majority owner of the New York based firm.
Between now and then, Benmosche still has work to do on the firm’s core businesses. As he said two-and-a-half years ago when he took the helm, he believes the firm can generate pretax income of between $6 billion to $8 billion dollars.
It has yet to do this under his watch, but he said it could happen this