The CEO of AIG tried to reassure the U.S. Congress on Wednesday that the bailed-out insurer will be able to repay taxpayer aid within three to five years if the economy permits.
If the marketplace holds the way it is right now, we think that the American taxpayer will be fully repaid, American International Group
It will take somewhere between three to five years, he said, adding that if the economy worsens, it could be longer.
Liddy, who has been CEO for less than eight months, met some harsh criticism at a hearing before the House of Representatives Committee on Oversight and Government Reform.
Democratic Representative Dennis Kucinich wagged his finger at Liddy and accused AIG of cheating the pension funds of public employees in Kucinich's home state of Ohio.
I came to Congress not to represent these people on Wall Street who have been shafting the American people ... Not going to let you get away with it, Kucinich said to Liddy.
Once the world's largest insurer, AIG was bailed out last September when it could not meet cash calls from trading partners of derivatives written by its financial products unit. The government at the time viewed a possible collapse of the vast company as disastrous to the world financial system.
So far, the United States has agreed to extend up to $180 billion in aid for AIG. In exchange, the government has taken nearly 80 percent ownership of the company.
Liddy, who receives an annual salary of $1, was recruited within hours of AIG's September 16 bailout, with a mandate to sell off assets to generate funds to repay taxpayers. He had recently retired as chairman of Allstate
To date, AIG has reached agreements to sell more than a dozen businesses and properties, generating proceeds of about $5 billion. Some of the large sales it had planned have foundered amid the credit crisis, leading the company to consider initial public offerings as a potential avenue.
Liddy told Reuters in a recent interview AIG could launch a trio of initial public offerings early in 2010. These businesses could still be sold outright if credit conditions improve and private buyers emerge to buy the businesses.
Proceeds from asset sales are to repay AIG's debt of about $45 billion drawn from a Federal Reserve credit facility, and another $40 billion received in another federal program.
We will do everything we can to not require additional federal funding, Liddy told the committee. Asset values have to stay strong. There has to be a capital market that allows us to take businesses public.
(Reporting by Kevin Drawbaugh; Editing by Andrea Ricci)