AIG to concentrate on insurance business, plans divestiture of other assets

By Lisa Kerner

Charlotte, N.C., Oct. 3 - American International Group, Inc. said it plans to refocus on its property and casualty insurance businesses while considering the sale of its remaining "high-quality businesses and assets."

The company said it will retain an ownership interest in its foreign life insurance operations.

"To realize our objective, we will sell a number of extraordinary businesses that are proving to be highly attractive to buyers," AIG chairman and chief executive officer Edward M. Liddy said in the release. "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 also intends to generate sufficient liquidity to repay the outstanding balance of its loan from the Federal Reserve Bank of New York and to address its capital structure, according to a company news release.

As of Sept. 30, AIG said it had drawn $61 billion on the Federal Reserve credit facility.

It was previously reported that the Federal Reserve Bank of New York would lend up to $85 billion to AIG. The loan runs for 24 months and is priced at Libor plus 850 basis points.

AIG, a New York financial and insurance services company, said it is also actively at work on a number of alternatives for its financial products business and its securities lending program.

Global coordinators for the divestiture program are Blackstone Group and J.P. Morgan.

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