NEW YORK (AP) — Insurance giant American International Group Inc. said Thursday that it's selling part of its stake in Asian insurer AIA Group Ltd. and plans to pay off more of its loans from the U.S. government.
AIG said that proceeds from the sale of up to $2 billion of AIA shares to certain big investors will be used for general corporate purposes, including possible stock buybacks. Meanwhile, the insurer's board also approved the repurchase of up to $5 billion of shares of its common stock from the U.S. government.
AIG, which is based in New York, nearly collapsed in 2008. It received $182 billion from the U.S. government — the biggest of the Wall Street bailout packages — after suffering massive losses from investments in derivatives.
The Treasury Department currently owns about 53 percent of AIG stock. It has brought down its stake from 92 percent after selling shares four times in the last couple of years for a total of $23.3 billion.
AIA used to be part of AIG, but the insurer spun off the Asian division as it worked to pay down its debt to the U.S. government. AIA's 2010 initial public stock offering in Hong Kong raised $20.5 billion, which AIG used to pay bailout debt. The New York insurer sold an additional $6 billion in AIA shares this March.
AIG shares fell 81 cents, or 2.3 percent, to $34 in premarket trading. The company's shares, which plunged during the financial crisis, have gained about 50 percent this year.