Treasury will sell $5 billion shares of AIG stock

The Treasury Department said Friday it is set to sell about $5 billion shares of American International Group stock as a way to recoup the taxpayer investment made during the financial crisis nearly four years ago. 

AIG is expected to purchase upward of $3 billion of the stock being offered in this fourth round of sales of the nearly $164 million shares up for sale. 

The shares will sell for $30.50 and will reduce the Treasury’s remaining investment in AIG to $25 billion. 

The rescue of AIG in 2008 cost $182 billion in 2008. 

In addition to principal repayments, the Federal Reserve and Treasury also have received additional income beyond that from interest, fees and other gains totaling $14 billion, including approximately $13 billion from the Federal Reserve’s investment and approximately $1 billion from Treasury’s investment.

The underwriters also have a 30-day option to purchase up to an additional $675 million in common stock from Treasury.

After the sale the Treasury will own 55 percent of the firm's common stock. 

The sale decision comes on the heels of AIG's announcement on Thursday that its net income was up 27 percent in the second quarter.