AIG Gives Treasury $2 Billion in Partial Bailout Repayment
American International Group (AIG) gave the U.S. Treasury Department $2.15 billion this week after completing the sale of a Taiwan unit. This brings the life insurance company that much closer to its goal of repaying the department completely for the bailout it received after the financial crisis.
AIG Sells Nan Shan Life Insurance Co.
On Thursday, AIG announced it had closed the sale of a Taiwan unit called Nan Shan Life Insurance Co. After struggling to sell the unit for months, AIG said in a statement that it had closed the sale to a previously disclosed buyer, Ruen Chen.
The reason for the difficulty in sale was because regulators in Taiwan had blocked a prior deal, ruling that an earlier buyer lacked financial strength and commitment to Nan Shan to qualify for purchase. The regulator did, however, sign off on Ruen Chen, a cement-to-footwear consortium that AIG pick after the first buyer was rejected.
Insurer Closer to Repayment
After receiving the funds from the purchase, AIG handed the money over to the Treasury to reduce the amount owed from the bailout it received years ago. Added to the $37 billion AIG paid in Nov. 2010 along with other payments made, AIG now owes roughly $9.3 billion.
The company has earmarked other assets that can be sold in part or full to pay down the remaining amount. Included in that group of assets is pan-Asian life insurer AIA Group Ltd. and aircraft leasing firm International Lease Finance Corp.
In a recent Wall Street Journal article, Tim Massad, Treasury’s assistant secretary for financial stability, noted his pleasure in the steps the company has taken.
“This is another important milestone in AIG’s remarkable turnaround,” he said. “We continue to make progress in recovering the taxpayers’ investments in AIG.”