The U.S. Treasury hired Greenhill & Co. to help it dispose of its investment in bailed-out insurer American International Group, which the Treasury will own 92.1 percent of from early next year.
The 18-month contract is dated Nov. 18, though the New York Times reported it was first posted on the Treasury’s website the evening of Nov. 22.
Greenhill will be paid $500,000 a month for the first 12 months of the pact and $175,000 a month for any month after that through the contract’s termination, for a total of $7.05 million if the contract runs the full 18 months.
The U.S. has an option to extend the contract for another six months, which would bring the total to $8.1 million.
AIG and the Treasury are in the process of a recapitalization deal that will pay off the Federal Reserve of New York for its aid to the insurer and increase the government’s stake in the company.
AIG’s bailout ballooned to more than $182 billion at one point, and even after the recapitalization closes it will still owe around $100 billion.
Given the gain in AIG’s shares since the bailout and the improved performance of its businesses, the government expects to ultimately make money on the company’s rescue.
(Reporting by Ben Berkowitz; Editing by Derek Caney)
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