AIG’s plan to repay bailout is coming together

American International Group is seeing plans to free itself of U.S. government support start to come together two years after it was bailed out and expects taxpayers to profit from their investment.

AIG is close to finalizing a plan for the government to sell its stake in the insurer, which would see the Treasury Department convert $49 billion of preferred stock into common shares to be sold over time, Chairman Steve Miller said Wednesday.

AIG also is close to selling two life insurance units in Japan to Prudential Financial Inc. for about $4.8 billion in cash, a source familiar with the matter said.

The developments show AIG is making significant progress in disentangling itself from the government, although it still has a long way to go before the U.S. taxpayers get paid back in full for their $182.3-billion rescue package.

An announcement of the repayment plan, which another source said could come within days, would also mark a big win on a politically charged bailout for the government at a crucial time. The $700-billion Troubled Asset Relief Program, set up amid the 2008 financial crisis, expires Sunday and the Americans are set to go to polls for mid-term elections in November.

AIG has not drawn on all the assistance and needs to pay back around $100 billion, with the money going to the Federal Reserve Bank of New York and the Treasury. The government also owns nearly 80% of AIG.

“We want to get the total to zero,” Miller said. “If we are successful and do as well as we hope then actually the government would have walked away with a big profit.”