AIG has ‘excellent chance’ of repaying govt: CEO

AIG has ‘excellent chance’ of repaying govt: CEO

(NEW YORK) American International Group Inc, the insurer bailed out by the US, has an ‘excellent chance’ of repaying the government, chief executive officer Edward Liddy said on Tuesday at the company’s annual meeting.

AIG said last week it would reduce its debt under a Federal Reserve credit line by US$25 billion by handing over stakes in two life insurance units that operate outside the US. The New York-based company has tapped about US$40 billion from the line.

AIG has received four bailouts, totalling US$182.5 billion, after agreeing in September to turn over a majority stake to the US when the company was overwhelmed by losses on bad bets tied to the US housing market. In addition to a US$60 billion credit line, the rescue includes US$52.5 billion to buy mortgage-linked assets owned or insured by the company, and an investment of as much as US$70 billion.

‘We believe there is an excellent chance that we can repay the government,’ Mr Liddy said.

Tuesday’s meeting, previously scheduled for May 13, had been postponed as the trustees overseeing the US stake sought newcomers for the board. Mr Liddy has said that he plans to step down from the board and that the chairman and CEO posts should be split. — Bloomberg

Source : Business Times - 02 July 2009

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