CHICAGO: The US government will audition bankers to manage a public offering of its stake in insurer American International Group (AIG), according to a report on Saturday in the Wall Street Journal.
Citing "people familiar with the matter" the paper said auditions would be this coming week in New York. An AIG spokesman declined to comment on the report on the Journal's web site.
Treasury and AIG officials will meet with representatives of 10 banks seeking to play a part in the stock offering, the paper said.
AIG received the largest bailout of the credit crisis, at one point owing the US government more than US$182 billion (US41 = RM3.07). The government now stands to make a huge profit on the deal with a series of stock sales starting as soon as March.
The company said on Thursday that its board had approved the issuance of warrants to buy 75 million shares of common stock, subject to all the parties to the recapitalisation agreeing it can close by January 14.
While that does not in itself guarantee the deal will close next week, it was one of the final key steps to finish the transaction. AIG said it will issue a statement on January 12 disclosing whether all the parties have agreed the deal can close by January 14.
A person familiar with the situation, who was not authorised to speak publicly on the matter, said Friday the board's approval of the warrant issue showed the highest degree of confidence the deal will close next week.
Under the terms of the deal, the Federal Reserve Bank of New York will be repaid in full and the US Treasury Department will be left with a 92.1 pe rcent stake in AIG.
Shares of AIG closed up 1.21 per cent, on Friday at US$61.18 on the New York Stock Exchange.
Banks that previously agreed to provide unsecured loans to AIG through a revolving credit facility may get a role in the initial public offer, the Journal said. Some of those banks include JP Morgan Chase & Co, Citigroup and Bank of America.
Linus Wilson, a professor of finance at the University of Louisiana at Lafayette, estimated on Friday that taxpayers' paper profit on the AIG deal could come to US$35.6 billion if the warrants trade at the price he expects.
AIG had been busy on multiple fronts ahead of the weekend, in addition to the warrant issue.
Late on Thursday the company said it had agreed in principle to pay US$450 million to settle a lawsuit with rival insurers over workers' compensation premiums. On Friday, Taiwanese insurance regulators promised a swift review of AIG's pending sale of insurer Nan Shan Life. - Reuters
No comments:
Post a Comment