NEW YORK (Reuters) - Bailed-out insurer American International Group Inc <AIG.N set up a plan to protect tens of billions of dollars in valuable tax losses by limiting the number of new large shareholders in the company.
As of year-end, AIG had a federal net operating loss carryforward of $32.3 billion on its books. That asset, which investors consider extremely valuable, will let AIG offset taxes on future profits.
But AIG would be limited in its use of those assets, the company said on Wednesday, if it experiences an "ownership change" under the tax code.
AIG could have run afoul of the complicated rule, which has to do with large increases in positions by investors above a certain threshold, after a massive secondary share offering planned for late May. The company and the U.S. Treasury plan to sell at least $15 billion in stock.
Shareholders as of March 18, and holders of any new shares issued after that date, will receive a dividend of one preferred share purchase right for each common share.
"The plan is designed to reduce the likelihood that AIG will experience an ownership change by discouraging any person from becoming a 5 percent shareholder," the board said in a statement.
(Reporting by Ben Berkowitz; Editing by Derek Caney)