NEW YORK – Shares of American International Group Inc. climbed more than 4 percent on Tuesday as the Treasury Department announced that has sold all of its remaining shares of the insurance company.
The Treasury said that it received $32.50 per share for its 234.2 million remaining shares, which represented a 16 percent ownership stake in AIG. With this sale, the Treasury said that the government has received $22.7 billion more than the $182 billion bailout it provided to support AIG during the height of the financial crisis.
In an internal memo that CEO Robert Benmosche sent to AIG employees, the executive said that the closing of the transaction would fully resolve America’s financial support of the company.
It marks one of the most extraordinary – and what many believed to be the most unlikely – turnarounds in American business history, he wrote.
Benmosche said that AIG and its workers kept their promise to rebuild the company and deliver a profit and that it is now up to the company to exceed the expectations of its clients, investors, regulators and other shareholders.
AIG received the largest government bailout package, including both loans and federal guarantees. The New York company almost collapsed at the height of the financial crisis in 2008. The company suffered massive losses from financial instruments whose value was based on mortgage securities.
Since the financial crisis, AIG has undergone a significant restructuring that has cut the size of the company nearly in half aimed at focusing on its core insurance operations. John Nadel of Sterne, Agee & Leach said he wasn’t surprised by the timing of the Treasury announcement, as he expected that the AIG’s announcement of its estimated losses from Superstorm Sandy would push the Treasury to exit the stock soon.
On Friday, AIG said it estimates it will take $1.3 billion in losses related to Sandy. The losses are after taxes and include reinsurance recoveries.