Update adds change in the board of directors.
American International Group
actually said something promising during its annual meeting on Tuesday.
Executives of the insurance giant said there is an "excellent chance" it will be able to repay the government's massive loan and that AIG is actually "more stable than before."
Meanwhile, investors are awaiting a reverse stock split that is expected to come into affect later today. This would mean if you own 1,000 shares you now own 50.
AIG will initially multiply the share value by a like amount, so investors will retain their equity, but it's unlikely they can grow their investment.
Tuesday was the first time shareholders were able to gather since the AIG mess surfaced last year.
And while the meeting was relatively subdued, shareholders voted in a new reign of government-backed directors, with about seven of the new directors recommended by either the U.S. Treasury Department or the trustees. Only fair, seeing as the government now owns 80% of the flailing insurer.
AIG has been under public scrutiny after losing $99 billion last year, mostly from its exposure to credit default swaps. The company expects to incur more losses from swaps this year.
It has also been berated for bonuses awarded in its financial products unit, the source of much of its losses.
But government-placed CEO Edward Liddy said the financial products unit has nearly halved its derivatives exposure, to $1.4 trillion from $2.7 trillion, and by year-end "our risk will have been reduced substantially from its current status."
Liddy plans to step down, but a timeframe on his replacement was not revealed.
AIG had delayed its annual meeting, usually held in May, to give it more time to shuffle its board, which has been almost entirely reconfigured over the last year.
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