The US Government’s $US182 billion ($172.18 billion) rescue package of troubled insurer AIG has been repaid, plus change, in a windfall for taxpayers.

Four years after stepping in to save AIG – and by extension the financial system – from collapse, the US Treasury Department has sold another chunk of the company for $US18 billion ($17.03 billion), making $US12.4 billion ($11.73 billion) profit.

Future sales of AIG stock will go straight to the Treasury’s bottom line. Based on a sale price of $US32 ($30.33) per share, the Government could bank a further $US10 billion ($US9.45 billion) from its remaining 317 million shares.

The latest offering of 553 million shares went beyond market expectations and cut the Government’s stake from 53% to 21.5%.

The Treasury sold at $US32.50 ($30.74) per share, well above its breakeven of $US28.72 ($27.16).

AIG bought 153 million shares for $US5 billion ($4.72 billion). Underwriters have been given until October 12 to buy up to an additional $US2.7 billion ($2.55 billion) in common stock, which could potentially reduce the Government’s stake to about 15%.

“Taking action to stabilise AIG during the financial crisis was something the Government should never have had to do, but we had no better option at the time to protect the American economy from the damage that would have caused by the company’s collapse,” Treasury Secretary Tim Geithner said.

“To stabilise and then restructure the company with a very substantial positive gain for the American taxpayer is a significant accomplishment, but we need to continue the critical task of implementing Wall Street reform so the American economy is never put in this position again.”

Market expectations are now that the Government will divest the remainder of its shareholding next year.