Insurance giant AIG repays US Treasury $2 billion from Taiwan unit sale
19 August 2011
US insurance giant, American International Group (AIG), whose near-collapse in the fall of 2008 led to one of the biggest bailouts of the financial crisis, has paid $2 billion to the US Treasury as loan from the Troubled Asset Relief Program (TARP), from the sales of a Taiwan life insurance unit.
The repayment comes after AIG in January said that it has a deal to sell its Taiwan insurance unit Nan Shan Life Insurance Co to Ruen Chen Investment, a consortium led by local conglomerate Ruentex Group for $2.16 billion. (See: AIG to sell Taiwan insurance unit Nan Shan to Ruentex for $2.16 billion)
New York City-based AIG had been trying to sell Nan Shan, Taiwan's third-biggest insurer, and its previous attempt in June 2010 to strike a deal with Hong Kong-based Primus Financials for $2.15 billion fell apart after regulators voiced concerns over the competence of Primus in the insurance sector.
"We continue to make progress in helping the Treasury and taxpayers recoup their investment in AIG," said AIG president and CEO, Robert Benmosche.
"We are pleased to have completed the sale of Nan Shan to Ruen Chen - a great result for American taxpayers, for AIG and for Nan Shan's policyholders, employees and agents," he added.
The insurer, which had been crippled following the global financial crisis, was bailed out by the US government after injecting a whopping $182 billion in a bailout package
AIG sold 67 per cent of Hong Kong-based AIA last year in an initial public offering bought in $20.5 billion and in May, sold 100 million shares to raise $8.7 billion.
The US Treasury holds a $9.3 billion preferred interest in the special purpose vehicle after receiving money from the Nan Shan sale, which leaves AIG with $51 billion left to pay the US government.