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Government says turning profit on AIG bailout

Associated Press Modified: September 10, 2012 at 9:01 pm •  Published: September 10, 2012

WASHINGTON (AP) — The U.S. government said Monday it will show a profit of more than $12 billion from its $182 billion bailout of AIG after selling a big chunk of its shares in the insurer.

The Treasury Department announced the sale of almost 554 million American International Group Inc. shares at $32.50 apiece, netting the government about $18 billion.

The sale reduces the government's stake in AIG to under 22 percent from about 53 percent. That puts its holdings in the insurer below a majority stake for the first time since the 2008 bailout.

It will also mean that the $182.3 billion bailout has been fully recovered, and then some. The Treasury Department said it and the Federal Reserve have recovered $194.7 billion so far.

"To stabilize and then restructure the company with a very substantial positive gain for the American taxpayer is a significant accomplishment, but we need to continue the critical task of implementing Wall Street reform so that the American economy is never put in this position again," Treasury Secretary Tim Geithner said in a statement.

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