Government hopes to make estimated $15.1bn profit through AIG stake sale | WPN World People News

US Taxpayers could make a profit of up to $15.1 billion on the massive emergency assistance given to insurer American International Group during the 2008 financial crisis, the Government Accountability Office said.

The Congressional watchdog, in a report Monday, said the total return depends on the health of AIG and other factors relating to the Treasury Department's ownership stake.

The government had given more than $180 billion in aid to the insurer in 2008 through various mechanisms, including cash infusions. Except for an amount of $46.3 billion still outstanding, the government has managed to recoup the rest.

The GAO said that AIG's improved financial health has brightened the outlook on unpopular bailouts from the financial crisis.

"Based on the composition of the remaining federal assistance to AIG [and] the repayment and recovery progress thus far on all assistance ... the government could receive total returns of approximately $15.1 billion in excess of the assistance provided, including interest, dividends, and fees," the GAO said in its report.

The GAO report noted that those gains do not reflect the "subsidy costs associated with the assistance."

On Sunday, the Treasury Department announced it was selling $5 billion in AIG shares at $30.50 a piece.

Source: United States News.Net