US to sell $5.8 bn AIG shares

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The US Treasury has agreed to sell $5.8 billion worth American International Group (AIG) shares, as it winds down ownership of the global insurer. The government is planning to sell 200 million AIG shares at $29 each; which stands to make as much as $7.1 billion, if more shares are bought from the US Treasury.

However, after this share sale, the government?s stake will fall to 77 percent from the previous of 92 percent. “Today’s announcement represents an important milestone as we continue to exit our stake in AIG,” Treasury Secretary Tim Geithner said.

He added, “The decision to provide this assistance was exceptionally difficult, but it’s clear today that it was essential to stopping a financial panic, preventing a severe economic collapse, and helping save American jobs.”

The government?s bailout for AIG during the financial meltdown was $180 billion. This act was then criticizes by the taxpayers as they thought this was a Wall Street excess.

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