AIG Completes Preferred Stock Sale To Government
The Associated Press
April 21, 2009
NEW YORK -- American International Group Inc. completed a sale of preferred stock and issued warrants to the Treasury Department as part of a previously announced plan to receive additional financial support from the government, according to a regulatory filing submitted Monday.
New York-based AIG said in the Securities and Exchange Commission filing that it sold preferred stock and issued warrants to the government on Friday in exchange for $29.84 billion. The new funds are now immediately available for AIG's use.
The additional funding was announced last month when AIG disclosed a fourth-quarter loss of $61.7 billion, the largest ever quarterly corporate loss in U.S. history.
As part of the deal, AIG must avoid bankruptcy and the government must remain the majority owner of the insurer. The agreement also restricts AIG's ability to repurchase stock and requires limits on corporate expenses, lobbying and executive compensation.
AIG has received four rounds of support from the government since the credit crisis mushroomed in September. AIG initially received loans totaling about $85 billion to help it remain in business. The government has since renegotiated the funding and expanded it. As part of AIG's financial support the government has taken a roughly 80 percent stake in the insurer. AIG has now received a package of loans from the government worth about $180 billion.
Separately, AIG delayed the filing of its proxy statement ahead of its annual shareholders meeting amid a potential reshuffling of its board of directors, according to a Wall Street Journal report citing anonymous sources. AIG is planning to expand and change the composition of its 11-member board, according to the report.
"We are in ongoing discussions regarding several issues and as a result have not yet filed our proxy statement," AIG spokesman Mark Herr told The Associated Press. "We intend to reschedule our annual meeting and will announce the new date in due course."
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