“Hank” Greenberg Intends to Sell His AIG Shares

AIGThe current atmosphere at Hank Greenberg’s office, the former American International Group (AIG) chairman, must be right now that of guilt and humiliation. Apparently, the hopes that “Hank” Greenberg, who ran the company successfully for several decades and shifted its focus from personal insurance to high-margin corporate coverage, would be able to somehow structure a program outside of the government’s plan to save AIG ; at this point seem to be rapidly fading.

Wednesday, the giant insurer after scrambling to find a way out of its financial woes, agreed to take the U.S. government up on a two-year, $85 billion loan, at an interest rate of about 11.5% to help stave off bankruptcy. In return, the government will get a 79.9% stake in AIG. To make matters worse, the nation’s largest insurer now faces an FBI investigation. The news prompted its stock to sink nearly 35% Wednesday. But, the negative news seems to keep rolling in for AIG.

According to the Securities and Exchange Commission [SEC], the ex-Chairman has now filed a 13D Form to sell shares in the open market.

The Reporting Persons presently intend to engage in open-market sales of shares of Common Stock for liquidity and other purposes. Such sales may be made at such times, in such amounts and at such prices as each of the Reporting Persons may in its sole discretion determine. Such sales may, individually or in the aggregate, materially decrease the percentage of the outstanding Common Stock of the Issuer beneficially owned by the Reporting Persons.

It is too early to stipulate if the filing is margin calls related, but the nosedive stock trajectory has apparently caused serious liquidity issues for the insurer.

In an interview on CNBC early Wednesday, Warren Buffett, said that over the weekend there was some interest expressed from Berkshire Hathaway Inc. (BRK-A), in one of AIG’s assets, “but the pressures” continued Buffett, “were such, and the hole was deep enough, that they simply couldn’t get it worked out”.

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About Ron Haruni 1068 Articles
Ron Haruni is the Co-Founder & Editor in Chief of Wall Street Pit.

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