NEW YORK—Insurance giant American International Group Inc. (AIG) reported a $538 million second-quarter loss last Friday and revealed that discussions were under way between the company and the U.S. government to sell its large stake in the company.
The government owns 80 percent of the company.
The company’s total loss was $2.66 billion, according to AIG, but the bulk of the losses were attributable to the U.S. Treasury and the Federal Reserve Bank of New York (FRBNY), leaving common shareholders with only a loss of $538 million.
Part of the loss was due to costs associated with the sale of its Japanese Alico unit and its Taiwanese Nan Shan Life Insurance Co. business.
“AIG’s continuing insurance operating results remain solid, while the company continues to execute on its restructuring plans and prepares for separation from the U.S. government,” said CEO Robert Benmosche in a statement. “In recent weeks, we have commenced discussions with the FRBNY, the Department of the Treasury and the trustees of the AIG Credit Facility Trust with respect to a proposed strategy to repay the FRBNY Credit Facility and allow the government to exit its owner relationship with AIG.”
AIG, which nearly collapsed in September 2008, was rescued in separate bailouts by the Treasury and FRBNY shortly thereafter. Since the rescue, the company has sold numerous assets domestically and abroad to repay its taxpayer obligations. Today, it still owes taxpayers more than $100 billion.
Benmosche has said that the company is preparing to spin off its Hong Kong-based American International Assurance Inc.
The government owns 80 percent of the company.
The company’s total loss was $2.66 billion, according to AIG, but the bulk of the losses were attributable to the U.S. Treasury and the Federal Reserve Bank of New York (FRBNY), leaving common shareholders with only a loss of $538 million.
Part of the loss was due to costs associated with the sale of its Japanese Alico unit and its Taiwanese Nan Shan Life Insurance Co. business.
“AIG’s continuing insurance operating results remain solid, while the company continues to execute on its restructuring plans and prepares for separation from the U.S. government,” said CEO Robert Benmosche in a statement. “In recent weeks, we have commenced discussions with the FRBNY, the Department of the Treasury and the trustees of the AIG Credit Facility Trust with respect to a proposed strategy to repay the FRBNY Credit Facility and allow the government to exit its owner relationship with AIG.”
AIG, which nearly collapsed in September 2008, was rescued in separate bailouts by the Treasury and FRBNY shortly thereafter. Since the rescue, the company has sold numerous assets domestically and abroad to repay its taxpayer obligations. Today, it still owes taxpayers more than $100 billion.
Benmosche has said that the company is preparing to spin off its Hong Kong-based American International Assurance Inc.
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