AIG 'to announce restructuring package'
The Wall Street Journal reported today that American International Group Inc. plans to disclose a restructuring by early tomorrow that is likely to include the disposal of major assets including its aircraft-leasing business and other holdings.
The Journal said on its website that the world’s largest insurer was also talking to several private equity firms about getting more capital and was hoping to raise more than 10 billion US dollars.
The New York-based insurer has already raised US$20bn (€14bn) in fresh capital this year.
Like other insurers, AIG has been hit hard by deterioration in the credit markets amid concerns that complex, structured investments it insures will increasingly default.
Over the past three quarters, AIG has lost about US$25bn (€17.5bn) in the value of credit default swaps – or default protection for bondholders – and about US$15bn (€10.4bn) on other investments.
The insurer is considering selling its aircraft-leasing arm, International Lease Finance Corp. AIG was considering selling other parts of its business, including assets related to property and casualty insurance, the Journal said.
The moves follow a rapid plunge last week in the company’s shares – the stock fell more than 30% on Friday alone – amid concern that its capital base is not sufficient.
Late on Friday, Standard and 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.
