North Carolina: American International Group Inc. said on 14 September, it is reviewing its operations and discussing possible options with outside parties to improve its business after a week when its stock dropped 45% amid concerns about the company’s financial underpinnings.
“A lot of meetings (are) going on. We’re looking at a lot of options. We’re talking with a lot of parties,” said spokesman Nicholas Ashooh, declining to comment further.
New York Insurance Superintendent Eric Dinallo and a representative of the state’s governor’s office have spent the weekend at AIG’s offices working with the company and others to craft a solution that protects policyholders, said Dinallo’s spokesman David Neustadt in an e-mail.
AIG’s chief executive, Robert Willumstad, who took the reins on the world’s largest insurer in June, may announce a turnaround plan Monday, possibly involving the disposal of major assets including its aircraft-leasing business and other holdings, the Wall Street Journal reported Sunday, citing unidentified people.
The New York-based insurer previously scheduled an announcement for 25 September.
Willumstad has indicated he was willing to shed some assets, saying about a month ago that a “less complex AIG would be a better competitor.”
The Journal said on its Web site on Sunday that AIG was talking to several private equity firms about getting more capital and was hoping to raise more than $10 billion. The New York-based insurer has already raised $20 billion in fresh capital this year.
The need for action was likely exacerbated by a 45% drop in AIG’s stock last week. The stock fell more than 30% on Friday alone, as Standard & Poor’s warned that it could cut AIG’s credit rating by one to three notches because of concerns that AIG will have difficulty accessing capital in the short term.
As recently as June, AIG considered shedding ILFC, a company founded in 1973 that has a fleet of more than 900 airplanes valued at more than $50 billion. But newly appointed Willumstad said after reviewing ILFC’s business, “ILFC should be a part of the AIG portfolio.” ILFC primarily leases aircraft from Boeing and Airbus to major airlines and had net income of more than $200 million in the second quarter.