AIG may sell 15 businesses to repay $85 bn loan

Font Size

Print

Feedback

Email

Discuss

Related Articles

AIG may need more cash due to restructuringGoldman Sachs to axe about 3,260 jobs: ReportGoldman Sachs to axe about 3,260 jobs: ReportAIG's role in market crisis under probe

In a bid to secure its future as an independent company, the beleaguered insurance major American International Group is contemplating sale of its 15 businesses in order to repay the USD 85 billion government loan, media report says.

"AIG, is considering selling more than 15 businesses, including its aircra'FT' leasing unit, a stake in a large US reinsurer and billions of dollars in properties in an effort to repay USD 85 billion government loan and secure its future as an independent company," the 'Financial Times' reported.

The board of AIG met in New York on Sunday to discuss the radical plan for asset disposals aimed at helping the company emerge from its crisis.

AIG, was de facto nationalised this month when the US administration stepped in with an emergency loan a'FT'er AIG collapsed under credit related losses. The extended government loan would give Washington the right to buy majority stake in the company.

With the US Federal Reserve's rescue loan of up to USD 85 billion to save AIG from bankruptcy, the US government will get an equity stake of 79.9 per cent of the insurance titan under the agreement.

Quoting people close to the situation the daily said, AIG, led by its new chief executive Edward Liddy, wanted crucial businesses such as its international life insurance unit and its US pension businesses to be at the core of the "new AIG".

"But apart from those, AIG was prepared to consider selling most other operations. The company and its advisers, led by Blackstone and JPMorgan Chase, are believed to have drawn up a list of about 15-20 large businesses that could be sold," 'FT' added.

Among the units that are most likely to be sold are International Lease Finance Corp, one of the world's largest aircra'FT' leasing businesses, which is expected to fetch about USD 10 billion. AIG is believed to have received expressions of interest from Asian and Middle Eastern buyers, 'FT' said.

AIG's 59 per cent stake in Transatlantic Holdings, a listed reinsurer, is also believed to be on the block, as are its huge property portfolio and private equity investments including one in Londons City Airport.

Bermudian reinsurers are expected to be interested in AIG's stake in Transatlantic, 'FT' said quoting analysts and insurers.