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Published September 30, 2008 at 6:22 PM
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 American International Group Inc. is starting to sell assets to repay the $85 billion loan from the U.S. Federal Reserve.
The insurer sold its 50% stake in London City Airport to its joint venture partner, Global Infrastructure Partners, for an estimated £250 million ($460 million), according to The Times Online. AIG and GIP originally bought City for £750 million.
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London's City Airport is one of a rumored 15 to 20 businesses the company may sell. Those assets could include: - Real estate. AIG owns almost $16 billion worth of real estate
around the world in more than 30 countries and 14 U.S. cities.
Bloomberg reports that in New York City alone the insurer controls
three office buildings with more than 2 million square feet. One of
those Big Apple buildings is AIG's headquarters at 70 Pine St. in lower
Manhattan. Experts say the 66-story office building in the financial
district would make for a possible condo and/or residential conversion. AIG in its 10-Q for the quarter ended June 30 reported about $5.5
billion in real estate and other fixed assets, net of depreciation.
- Asset management and international operations. The Wall Street Journal
also is reporting that AIG is mulling the sale of its Brazilian assets,
which include Unibanco-AIG, the fourth-largest Brazilian insurance
company; a 7.34% stake in Providencia Industria e Comercio SA, a
Brazilian manufacturer of plastics and textiles; and a local private
equity fund. Several investors, including the Yuchengco business group, have
also expressed an interest in buying the Philippine unit of AIG, Philippine
American Life and General Insurance Co., Reuters reported Monday. Reuters concurrently reported that Kazakhstan's largest insurer Eurasia made a formal offer to buy the local subsidiary of AIG for an undisclosed amount.
- The general insurance business including property casualty insurance, Transatlantic Holdings Inc. and its mortgage guaranty
could be of interest to many insurers. AIG has a 59% stake in
Transatlantic, which could be worth about $2.3 billion, according to an
unnamed source speaking to The Daily Deal. Interested bidders could
include Berkshire Hathaway Inc.'s Warren Buffett and Maurice "Hank"
Greenberg, AIG's largest shareholder
and former chairman. Greenberg disclosed interest in acquiring the
company through his CV Starr & Co. investment vehicle. Japan's
Tokio Marine Holdings Inc. or Australia's QBE Insurance Group could
also be interested in the assets, according to Reuters.
- The life Insurance and retirement business is the
most valuable part of the business, according to The Daily Deal's
Michael Rudnick, and could pay off almost half of the Federal Reserve's
loan. AIG's domestic life operations could generate at least $41
billion from a sale, a source told The Daily Deal. AIG's foreign life
insurance business could alone sell for $50 billion Gary Ransom, an
analyst with Fox-Pitt Kelton, told The Associated Press.
Bidders for the life businesses might include Allianz SE, Sun Life
Financial Inc., Munich Re, AXA Group, Manulife Financial Group and
Prudential Financial Inc. Other potential bidders, according to Bloomberg,
could include Chubb Corp., Ace Ltd. or Allianz's Fireman's Fund
Insurance unit, which might be interested in buying AIG's unit that
sells coverage to individuals through independent agents.
- Financial Services, which includes aircraft leasing, capital markets and consumer finance operations,
was an asset AIG was said to be exploring the sale of prior to the
Federal Reserve's bailout of the company. AIG's International Lease
Finance Corp., which leases more than 900 aircraft
with asset values over $44 billion, could sell for its book value of
about $7.5 billion, while the consumer finance operation could command
its $2.5 billion book value, according to The Daily Deal. The Wall
Street Journal is reporting that International Lease Finance may be
bought by the unit's founder, Steven Udvar-Hazy. The unit's staff had shown interest in buying it from the parent a few months back.
See most of AIG's assets in the Financial Supplement for the Second Quarter. - - Maria Woehr, Gerald Magpily and Michael Rudnick
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