AIG Raises $8.7 Billion in Share Offering

American International Group, Inc. AIG announced Tuesday that the registered public offering of 300 million shares of its common stock, by AIG and the U.S. Department of the Treasury, was priced at $29.00 per share. The $8.7 billion raised in the offering was less than estimates of $9 billion to $20 billion. One hundred million shares will be issued and sold by AIG and 200 million shares will be sold by Treasury. Clare Baldwin of Reuters notes that "To be sure, Treasury and AIG only agreed earlier this month on the size of the offer, and the U.S. government did not make its investments in AIG with the intention of turning a profit. Rather, it acquired the stock under extreme duress, as the potential failure of the insurance giant threatened to exacerbate an already severe financial crisis in late 2008." AIG will not receive any of the proceeds from the sale of the shares of AIG common stock by Treasury. The company continues to fight its way back from the $180 billion+ it received from the government bailout in 2008. Restructuring, asset sales, and sale offerings have all contributed to progress, but much remains to be done. Treasury now owns 77% of AIG's equity - or 1.5 billion shares - down from 92%. According to its website, "AIG has modified its operations and structure to strengthen its financial condition and enhance the enterprise value of its nucleus of businesses to meet working capital needs and repay obligations to U.S. taxpayers." Continuing, "Since September 2008, AIG has made substantial progress protecting and enhancing the value of its key businesses, restoring AIG's financial strength, bolstering corporate governance, instilling a performance management culture, reducing risk, and repaying U.S. taxpayers."