What is 20% of $40 Billion?
Answer: 5 times the current valuation of AIG.
That is the amount they are selling to the public of AIU. Buying AIG right now is a no-brainer.
Sum of parts is worth a whole lot more than the current value of AIG. Bob Benmosche isn't a dummy. He came out of retirement to make money. If he didn't want to make money and deal with Congress, he would have never accepted this position.
The rumor mill has it that Chartis (fka AIU fka AIG) will be IPO'd, leaving a handful of stock with the parent AIG, a large handful to stock with the Government and a representative share to the AIG stockholders. Once this is completed, Chartis will have no legal obligation to the government, only AIG will, of which AIG will be allowed to drown and Chartis will be kept healthy.
wzu! The actual debt is $43B that they want to reduce to $25B after the IPOs. The equity portion held by the gvt is $60B today. The trick will be to monetize the equity. It will be done overtime. There is a possibility that the number goes to $40B.
WZU, you normally seem quite educated... yet here you are pandering to the media without doing your own research, you know very well that the 180 billion total is only the MAX that AIG could have recieved and that their actual USG help was closer to 125 billion... shame on you...
80% goes toward paying off the loan. That's $32 Billion. Not to mention that if you're a shareholder in the company now you get 20% of the spinoff value and even if the core company goes kaput you have a spinoff that will be worth far more than the current market price of AIG even after only taking 20% of it into account.
Again, this is a no-brainer.
AIG has access to $180 billion. However, they did not borrow half of that. You should try to learn the facts before spewing media fed nonsense! A 20% offering would still make it one of the largest IPO's ever. Moron