January 15, 2011 in Business

Government, AIG announce payback plan

Pallavi Gogoi Associated Press
 

NEW YORK – The government and AIG, the giant insurer rescued with $182 billion at the depths of the 2008 financial meltdown, announced a plan Friday to end taxpayer involvement in the company over the next two years.

As part of the plan, AIG paid back its $21 billion outstanding balance to the New York branch of the Federal Reserve. The Treasury Department will now own a 92 percent stake in the company and begin unloading stock on the open market in March.

In a separate statement, AIG President and CEO Robert H. Benmosche said: “Today, AIG, with the support of countless people, has accomplished a huge goal that many people once thought impossible: completely repaying the Federal Reserve Bank of New York.”

The rescue package for American International Group Inc., which included loans and guarantees, was the largest of any U.S. company that accepted government help during the September 2008 financial crisis.

The government holds roughly 1.67 billion shares of AIG now. Those shares were handed over to taxpayers at a value of just under $30 apiece and were trading Friday at about $54.

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