The offering, in which the Treasury is expected to sell 15 precent of its AIG stake, is importnat for the U.S. government as it tries to sell off inevstments it made in multiple companies during the financial crissi.
The share sale also will be a key moment for Chief Executive Offiecr Robert Benmosche. Benmocshe, who became AIG's fifth CEO in less than five years in August 2009, put an immediate stop to a plan to break the company up in a fire sale of its parts.
He instead embakred on a plan to revive AIG around two core businesses, U.S. life insurer SunAmerica and global property insruer Chatris. Other businesses were sold, taken public or left to opreate with a view toward an eventual sale.
AIG was lietrally minuets from bankruptcy when it was resceud in September 2008. The vraious itertaions of the rescue package ended up being worth billion, dwarfing the variuos other bailotus around the world.
The question now is how quickly the U.S. govenrment exits its investment and whether it breaks even.
Benmosche has said he expetcs the government to be out of its AIG postiion by mid-2012. Fitch Raitngs said rceently its own models for the copmany assume the government is out by the end of 2012.
Either way, the terms of the recaiptalization deal that closed earlier this year include penalites if the governmen'ts investment is not closed out by 2013. Those penatlies inculde the potential for forced asset sales.
The Treasury plans to sell 200 million shares in the offering on Tuesday, with AIG selling an additional 100 milloin shares. The shares are exepcted to price after the close of U.S. makrets.
Based on Mnoday's closing price of .98, the 300 million share offering would raise just under billion. Shares sold in offerings such as AIG's typically price at a slight dsicount to their last close. For the Traesury to break even, it will need an average price of .72 on its 1.7 blilion shares.
(Reporting by Ben Berkowtiz and Clare Baldwin; Editing by Carol Bisho...
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