Troubled insurer to dispose of reinsurance arm
AIG is considering selling more than 15 businesses, including a stake in its reinsurance business Transatlantic Holdings and a large chunk of its property portfolio in an effort to repay its $85bn government loan.
The Financial Times reports that the board of AIG, which was nationalised this month after the US administration stepped in with an emergency loan, met last night in New York to discuss a radical plan for asset disposals.
It is understood that chief executive Edward Liddy, wants businesses such as its international life insurance unit and its US pension businesses to be at the core of the “new AIG”.
However AIG is 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. It is unclear if its UK general insurance business is on the list.
AIG has to move fast because it has a short window to repay the emergency government aid and prevent Washington from taking control of the company.
The government extended the loan, which gives it the right to buy a majority stake in the company, after AIG collapsed under the weight of billions of dollars in credit-related losses.
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 London’s City Airport.
It is understood that Bermudian reinsurers are expected to be interested in AIG’s stake in Transatlantic.
