AIG selling off $2 billion of AIA stake

Insurance giant American International Group is selling part of its stake in Asian insurer AIA Group.

It plans to pay off more of its loans from the U.S. government, which it received after nearly collapsed in 2008. The company had suffered massive losses from investments in derivatives.

Read: AIG rising from the ashes

Overall, it received $182 billion from the U.S. government, the biggest of the Wall Street bailout packages.

AIG said proceeds from the current sale—of potentially up to $2 billion of AIA shares—will be used for general corporate purposes, including possible stock buybacks.

Meanwhile, the insurer’s board also approved the repurchase of up to $5 billion of shares of its common stock from the U.S. government.

AIA used to be part of AIG, but the insurer spun off the Asian division as it worked to pay down its debt to the government. It used $20.5 billion from that sale, as well as an additional $6 billion from AIA shares sold this March.

AIG shares fell 81 cents, or 2.3%, to $34 in premarket trading. The company’s shares have gained about 50% this year.

Read: Fed profits from sale of AIG assets and Paying the price for greed

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.