AIG to Refocus on Property and Casualty Business
American International Group, Inc. (AIG) announced this weekend that it intends to refocus the company on its core property and casualty insurance businesses, generate sufficient liquidity to repay the outstanding balance of its loan from the Federal Reserve Bank of New York and address its capital structure. AIG had drawn $61 billion on the Federal credit facility as of September 30, 2008.
AIG officials say the company plans to retain its U.S. property and casualty and foreign general insurance businesses, and to retain a continuing ownership interest in its foreign life insurance operations. The company is exploring divestiture opportunities for its remaining businesses and assets.
AIG officials say they also are actively working on a number of alternatives for the companys Financial Products business and its securities lending program.
"We are refocusing on our traditional strengths in property and casualty underwriting, says AIG chairman and chief executive officer Edward M. Liddy. We have a number of remarkable businesses with leading market positions and significant competitive advantages that could not be recreated today.
"To realize our objective, we will sell a number of extraordinary businesses that are proving to be highly attractive to buyers," Liddy says. "We have already been contacted by numerous strong, stable parties, and we expect that buyers will recognize the value of these properties, be a good strategic fit and offer the greatest potential for growth, profitability and continuing opportunities for employees. Our goal is to emerge from this process as a smaller but more nimble company that is solidly profitable and has good long-term growth prospects."
AIG's global coordinators for the divestiture program are The Blackstone Group and J.P. Morgan.
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