AIG memo: ‘Complete government exit’ in the works
Insurer aiming to regain independence; market conditions the wild card
American International Group Inc., the insurer that turned over a stake of almost 80 percent to the U.S., is in talks with federal regulators to become independent, Chief Executive Officer Robert Benmosche said.
“We have commenced discussions with the U.S. government on the process and terms of a complete government exit,” Benmosche told employees today in a memo. “Depending of course on market conditions, which could remain volatile, we expect to make meaningful progress in 2010 on repaying the Federal Reserve Bank of New York, and over time fully repaying all of our obligations to taxpayers.”
Benmosche, 66, is selling two non-U.S. life units, AIA Group Ltd. and American Life Insurance Co., to help repay the 2008 bailout that swelled to $182.3 billion. MetLife Inc. agreed to pay about $15.5 billion for Alico, and Benmosche plans an initial public offering for AIA after the collapse of a $35.5 billion deal to sell the division to Prudential Plc.
After selling the life divisions, New York-based AIG will be “well within striking distance of completely repaying the Fed,” Benmosche said in the letter. AIG separately owed the Treasury Department almost $50 billion, according to a June report from the Congressional Oversight Panel.
Treasury is considering a plan to convert AIG preferred shares into common stock and sell the holdings on the open market over two years, a person with knowledge of talks with the insurer said in April.
AIG posted second-quarter net adjusted income of $1.34 billion today, up from $1.14 billion a year earlier. The insurer gained 55 cents to $40.45 at 9:17 a.m. in early trading in New York.
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