AIG today announced that it will issue a new series of preferred stock for the U.S. Department of the Treasury in conjunction with the federal lifeline it received.
American International Group Inc. of New York will issue a series of convertible participating serial preferred stock to a trust that will hold these shares for the Treasury.
This stock will comply with the 79.9% aggregate shareholder voting power condition of the $85 billion bailout from the Federal Reserve.
The preferred stock will be issued without the customary special shareholders meeting, an AIG spokesman said, and will then be convertible into common stock.
Normally, this move requires shareholder approval.
But the insurer’s audit committee determined that any delay in seeking shareholder approval of the preferred-stock issuance would jeopardize AIG’s financial viability.
The insurer’s decision has been cleared by the New York Stock Exchange.
Nevertheless, AIG is notifying shareholders of its intent to issue the stock without their approval.
The insurer will distribute the preferred stock after it has received the required material approvals from government authorities.
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