US Treasury to receive $5.75 bn from AIG stock saleAugust 7th, 2012 - 1:36 pm ICT by IANS
Washington, Aug 7 (IANS) The US Treasury has said that it expected to receive $5.75 billion from the latest sale of the American International Group (AIG) stock, $750 million more than initially estimated, as the underwriters opted to buy additional shares.
In a statement Monday, the Treasury said underwriters have exercised their over-allotment option in full to purchase approximately 24.6 million additional shares of AIG common stock at the public offering price of $30.5 per share, Xinhua reported.
The Treasury announced last week that it had agreed to sell about 163.9 million AIG stock at $30.5 per share with estimated total proceeds of $5 billion. AIG pledged to purchase $3 billion of shares.
The offering is expected to reduce the Treasury’s remaining investment in AIG to approximately $24.2 billion, consisting of roughly 871.1 million shares of common stock, and bring the Treasury’s stake in AIG down from 61 percent to 53 percent.
At the height of the 2008 financial crisis, the Treasury and the Federal Reserve extended $182 billion to AIG, the cash-strapped insurance company, through the Troubled Asset Relief Program (TARP), a financial bailout program created to prevent a collapse of the banking system.
The latest sale is part of the Treasury’s ongoing efforts to wind down the TARP, and so far nearly 83 percent of the $416 billion funds disbursed under TARP have already been recovered, the statement said.
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Tags: 163, 6 million, aig, allotment, american international group, banking system, bn, collapse, common stock, federal reserve, financial bailout, financial crisis, insurance company, offering price, proceeds, public offering, stake, underwriters, us treasury, xinhua