U.S. government saved American International Group Inc. (AIG) from brink of collapse in 2008. There are $120 billion of taxpayer support and $49 billion from the Treasury's Troubled Asset Relief Program received by AIG. After the financial crisis, AIG made a plan that repaid U.S. taxpayers in full and $49 billion preferred shares converted by the Treasury Department into common shares. Those common shares could sell off to private investors which move would reduce the government ownership in the AIG. It clearly showed in AIG 2009 Annual Report that "Our company- wide strategy is focused on repaying taxpayers, achieving growth, and balancing risks."
According to the depth affected by financial crisis, AIG had to face worse remaining issue, debt, than before. AIG expected to raise more than $40 billion and sold their major assets to repay federal funds and the New York Fed, the largest creditor of AIG. But they lack of capability to repay the Treasury, due to their cash limited. Graci, an analyst at Chapdelaine Credit Partners, deduced the government has no choice. The government would preferred to sell their interest to the private investors.
However, the CEO of AIG, Robert Benmosche was diagnosed with cancer on October, 2010. It took more concerned by investors about AIG broad. Although he said the doctors found he had an "atypical positive response" to the drugs. And his condition and test results showed "while.. matters of cancer circumstances can change". He tried to avoid mention about his illness specific situations to prove his health well. He claimed that he doesn't want his health to get in the way, but he is well to lead the company out of the government's hands.
AIG faced huge pressure for repaying and the move of preferred shares to common shares hold by the Treasury Department. Their shareholder also had to take a risk from their volatile stock price and latency change on AIG board.
No comments:
Post a Comment