NEW YORK (Bloomberg) — American International Group Inc. intends to repay an $85 billion Federal Reserve loan before the two-year deadline and may decide which assets to sell within weeks, said Edward Liddy, who was appointed by the government to run the insurer.

AIG, which agreed to give the US an 80 percent stake in exchange for the credit line, may regain control after the loan is paid off, Liddy said in a town hall-style meeting for employees yesterday.

The loan is "enough" for AIG, the nation's largest insurer by assets, he said.

"I don't want to get things done 740 days from now and say, 'Oh, we just made it by the skin of our teeth,"' Liddy, 62, said. "As soon as it is paid down, and we no longer need it, we get control of the company again."

AIG, which almost collapsed this week after credit rating downgrades triggered a liquidity squeeze, has plunged 95 percent this year in New York trading. The US reversed its opposition to funding a rescue on September 16 after the Fed said AIG's failure would disrupt financial markets.

The company's quarterly dividend will be suspended to preserve capital, Liddy said. AIG spokesman Nicholas Ashooh said that the dividend due tomorrow will be paid, and future payouts "would have to be declared by the board".

Liddy told employees that he wasn't going to "liquidate" AIG, saying that the insurance businesses are "solid, capitalised and well funded".

A decision on unit sales will be made "within weeks," because the value of some businesses may diminish, Liddy said. "Every day we don't do something, it will hurt us," he said.

AIG shares gained 64 cents, or 31 percent, to $2.69 at 4.07 p.m. in New York Stock Exchange composite trading.

The Fed mandated that AIG's future asset sales must go to pay down any debt on the government loan, he said.

"I don't think it's the intent of the federal government to hamstring us so we can't run our businesses, but if you loaned somebody $85 billion, you want to have a little bit of say on what they can and cannot do," he said.

The company reported more than $18 billion in three quarterly net losses on writedowns tied to credit-default swaps, the protection for debt investors that plunged in value as the securities they protected declined. Liddy replaces chief executive officer Robert Willumstad, who was appointed in June amid record losses.

The government is lending AIG the money at 8.5 percentage points above the three-month London interbank offered rate, or a current rate of about 11.5 percent.

The agreement will give AIG, which sells insurance in more than 130 countries, time to sell assets "on an orderly basis," AIG said in a September 16 statement.

"We have good people in our company," Liddy said. "We've just been brought to our knees by a couple of large holes in the balance sheet."

"The mess we're in is solvable," Liddy said.