“We believe there is an excellent chance that we can repay the government.”

-AIG Chief Executive Officer Edward Liddy

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^[1]I find the above exceedingly hard to believe; Here is the full context:

“American International Group Inc., the insurer bailed out by the U.S., has an “excellent chance” of repaying the government, outgoing Chief Executive Officer Edward Liddy said today at the company’s annual meeting. AIG plans to reduce its debt under a Federal Reserve credit line by $25 billion by handing over stakes in two non-U.S. life insurance units, the insurer said last week. The New York-based company has tapped about $40 billion from the line.

AIG has received four bailouts, totaling $182.5 billion, after agreeing in September to turn over a majority stake to the U.S. when the company was overwhelmed by losses on bets tied to the housing market. In addition to a $60 billion credit line, the rescue includes $52.5 billion to buy mortgage-linked assets owned or insured by the company, and an investment of as much as $70 billion.

Why is that doubtful? Well, in 2006, they had revenues of $113 billion and profits of $14 billion — about 25% of her profits were due to AIG FP.

Now, with their reputation in tatters and their revenues cut in half, their “Enterprise Value” at a mere $91 billion, and a market cap at just over $3 billion, they are going to pay back $182.5 billion?

I’m not holding my breath . . .

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Source:
AIG Has ‘Excellent Chance’ To Repay U.S., Liddy Says ^[2]
Hugh Son, Erik Holm, and Tian Huang
Bloomberg, June 30 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=a4rJdEHwyE9E