American International Group Inc. and its government overseers are in talks to speed up an exit plan designed to repay U.S. taxpayers in full while enabling the giant insurer to regain independence, according to people familiar with the matter.
Under the plan, which could commence as early as the first half of 2011, the Treasury Department is likely to convert $49 billion in AIG preferred shares it holds into common shares, a move that could bring the government’s ownership stake in AIG to above 90%, from 79.8% currently, the people familiar said. The common shares would then be gradually sold off to private investors, a move that would reduce U.S. ownership and potentially earn the government a profit if the shares rise in value.
A successful exit from AIG for the Treasury Department would take several years and is far from certain, depending on, among other things, market conditions and the company’s ability to convince investors it can generate consistent profits from its core insurance businesses. Those will mainly consist of a global property and casualty insurer and a U.S. life insurance and retirement services business, which AIG hopes can together produce $6 billion to $8 billion in annual earnings.
Full Story: AIG Plots End to U.S. Aid – WSJ.com
