The US government and AIG announced a plan Wednesday to sell around $9 billion worth of shares in the bailed-out insurance giant, speeding the firm back toward private ownership. The treasury will sell 200 million shares and AIG 100 million shares for a total of $8.9 billion based on current market value.
The sale will be smaller than some reports had suggested. AIG's current low stock price appeared to have played a role. It is currently hovering near yearly lows at $29.62 a share. Once the world's largest insurer, AIG received more than 180 billion dollars from the government to help cover investments that disappeared amid the collapse of the US real estate bubble. It has since sold off units AIA and Metlife to pay of its debt to the US authorities. In addition, "AIG intends to use $550 million of the net proceeds from this offering to fund part of a previously disclosed litigation settlement," the firm said in a statement. It did not disclose what that litigation was.
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