NU Online News Service, Dec. 10, 3:32 p.m. EST
A Treasury official said the government is still working on the timing to sell its interest in American International Group, but it wants to do it as soon as practicable.
In an interview with Bloomberg Television, Timothy Massad, acting assistant secretary for financial stability at the U.S. Treasury, said the definitive agreement filed Wednesday by AIG is a "major milestone" and the Treasury is "focused on completing this."
"We'll dispose of our investments as soon as practicable, but in an orderly manner, and we'll decide how to do that in the days ahead," Mr. Massad said.
Under the plan to sell the Treasury's holding, the government's stake will increase to about 92 percent of AIG–up from its original stake in the company of about 80 percent. Under that scenario the government could profit from its investments in the insurance giant.
The government's strategy to bailout AIG in September 2008 proved to be the right decision, as two years later the Treasury is "in the position to recover our entire investment," he said.
A profit "depends on market price in the future," Mr. Massad added, but at the current price of AIG shares, the Treasury would make a profit.
Recent reports citing unnamed sources have said the Treasury plans to offer between $10 billion and $15 billion of stock with AIG in the first half of 2011.
The agreement filed by AIG listed the sale of its common stock by the Treasury as a risk factor to its recapitalization plan due to a dilution effect.
According to the new deal, AIG has the right to raise up to $3 billion in a public offering by Aug. 15, 2011.
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