American International Group Inc. is in the red. Deep red. After reporting a loss of $7.8 billion two weeks ago, the company has announced plans to turn things around. The Wall Street Journal reports Tuesday the insurance conglomerate intends to unload some noncore businesses to raise cash and reinvest in more high-growth businesses, which CEO Martin Sullivan points to as "foreign life and retirement and its aircraft leasing business."
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Sullivan's reference to aircraft leasing unit International Lease Finance is interesting to say the least. Only last week, the Los Angeles-based airline leasing company had made rumblings of possibly asking AIG to divest the unit because of a downgrade by credit rating agencies, Standard & Poor's and Fitch Ratings.
At any rate, AIG will already have a lot to work with as it raised $20 billion last week, exceeding its goal of $12.5 billion, from the sale of common stock, convertible and hybrid securities. AIG, however, may be competing with the likes of other deep pocketed bidders, such as Warren Buffett's Berkshire Hathaway Inc., which has $60 billion stock piled, and several private equity firms, that are interested in European assets. - Gerald Magpily
See Wall Street Journal article
See MarketWatch article
See Dealscape: Buffett's European vacation
See Dealscape's Ratings Review: AIG downgrades spell trouble
