AIG Seeks Yet More Cash
By Deborah Hyde
City Wire (www.citywire.co.uk)
February 24, 2009
Troubled US insurance giant American International Group is scrambling around to source yet more cash as it prepares to announce a $60 million loss for the fourth quarter early next week.
Among the options the group is exploring are the sale of its much prized AIA insurance business -which insurance group Prudential and HSBC are reportedly keen to get their hands on.
First round bids for AIA are due this week, according to news reports.
Meanwhile, the group is aleary thought to have received bids for some or all of its American Life Insurance business from groups including France's Axa although reports suggest the bidders may already be moving to reduce their offers because the unit's financial position is deteriorating.
The group has also reportedly approached the US government for a third government handout, according to reports on CNBC, including discussions about trading debt for equity.
CNBC says the massive losses are related to writedowns on commercial real estate and other assets and said the group's lawyers are preparing to file the group for bankruptcy if talks with the government go nowhere.
The group has already received about $150 billion from the government.
AIG has said it plans to sell all assets except its US property and casualty business, foreign general insurance, and an ownership interest in some foreign life operations as it needs to raise money to pay the government back.
AIG operates in more than 130 countries around the globe including the UK, where it runs a life insurance business.
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