London: “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 $85 billion government loan,” media report says.
“AIG, is considering selling more than 15 businesses, including its aircraft leasing unit, a stake in a large US reinsurer and billions of dollars in properties in an effort to repay $85 billion government loan and secure its future as an independent company,” the Financial Times (FT) reported.
The board of AIG met in New York yesterday 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 after 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 $85 billion to save AIG from bankruptcy, the US government will get an equity stake of 79.9% 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 aircraft leasing businesses, which is expected to fetch about $10 billion. AIG is believed to have received expressions of interest from Asian and Middle Eastern buyers,” FT said.
“AIG’s 59% stake in Transatlantic Holdings, a listed reinsurer, is also believed to be on the block, as are its huge property portfolio and private expected to be interested in AIG’s stake in Transatlantic,” FT said quoting analysts and insurers.
“However, AIG, Blackstone and JPMorgan, were all unavailable for comments,” FT reported.