New York-based American International Group Inc. is negotiating with U.S. Treasury officials in order to speed its payback of the financial assistance the company received during the financial crisis, according to published reports.

The Wall Street Journal reports today that the plan involves converting the $49 billion in AIG preferred shares currently held by the Treasury into common shares sometime in early 2011. Treasury would then sell the shares to private investors over several years, potentially turning a profit if the shares rise in value. If the plan comes to fruition, it would be the latest in a series of moves made by AIG President and CEO Robert Benmosche to hasten payback of the estimated $120 billion in government assistance still outstanding.

In August, AIG and New York-based Fortress Investment Group LLC announced an agreement under which Fortress will acquire 80% of American General Finance Inc., AIG’s consumer credit division.

Additionally, AIG is planning an initial public offering of Asia-based American International Assurance (AIA) on the Hong Kong stock exchange later this year. In March, a plan to sell AIA to Britain's Prudential Plc for $35.5 billion collapsed after Prudential shareholders balked at the price. Separately, AIG is set to sell another of its Asia-based units, American Life Insurance Co. (ALICO) to New York-based MetLife for  $15.5 billion.

Commenting in August on the company’s financial fortunes, Benmosche said there was light at the end of the tunnel. "AIG is getting stronger every day,” he said. “We still have more work to do, but we will finish the job and make sure we repay the American taxpayers.”

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