US Treasury launches $18bn AIG offering The US Treasury has launched its biggest divestment of bailed-out insurer AIG, making up to $20.7bn of its dwindling stake available for sale and probably reducing the US taxpayer to the status of a minority shareholder. The public offering comes a few weeks after the Federal Reserve Bank of New York completed its final sale of securities associated with the AIG rescue in 2008, marking the end of the Fed's portion of the contentious bailout while booking a $17.7bn total net profit for taxpayers. IN Insurance The Treasury's ownership of 871m common shares could be reduced to 262m shares, or less than one-fifth of the company's common equity, if sold at Friday's close of $33.99. US taxpayers had made $182bn available to AIG. Some $23bn of their overall investment remains unpaid. Combined with the share offering and the valuation of the remaining stake, the US Treasury probably will eventually book a profit on its rescue of what was once the world's largest insurer. The offering comes about two months before November's presidential election. To be able to say that the once-reviled bailout of AIG could turn a profit for US taxpayers would represent a coup for Barack Obama, US president, and Tim Geithner, his Treasury secretary. In May, the Government Accountability Office, the investigative agency of the US Congress, estimated that the Treasury could make a $15bn profit on the AIG rescue. The Treasury is making $18bn of shares available for sale, with an additional $2.7bn available over the next month to cover potential over-allotments. At Friday's close the total sale could represent 609m shares. AIG said on Sunday that it had indicated it intends to buy up to $5bn of the shares. Shares in AIG have risen 47 per cent this year as both the Treasury and the New York Fed have unwound their investment in the company. The Treasury once owned 92 per cent of the company. It has pared down its stake with a series of share offerings as AIG's fortunes have improved. In August, AIG reported second-quarter earnings of $2.3bn, following a $1.8bn profit for the first quarter of the year. Stronger earnings and more confidence in its prospects convinced AIG earlier this year to rebrand certain operations using the group name. Since its rescue, AIG has sold businesses and focused on its property and life assurance businesses to stabilise earnings. It was bailed out in 2008 after soured bets on credit derivatives led the company to the brink of failure during the crisis.