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Published May 28, 2009 at 12:28 PM
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 It looks like American International Group Inc. (NYSE:AIG) is trimming down more assets to pay back the government's $180 billion bailout. Now AIG plans to sell about two-thirds of its stake, or around 26 million shares, in reinsurer Transatlantic Holdings Inc. (NYSE:TRH), according to The Wall Street Journal. The stake, which would decrease AIG's holdings in the reinsurer from 59% to 20%, is worth $985 million, according to Reuters. If sold at that value, it could bring the proceeds of AIG's
total asset sales to more than $6 billion, a fraction of the
total the company needs to repay taxpayers. The move is significant because AIG has been a longtime investor in Transatlantic, and because a sale is part of a strategic plan to eventually liquidate AIG's holding company. The assets the insurer has sold include:
There are also several sales still in the works:
- Franklin Resources Inc. and Crestview Partners are in exclusive talks with AIG over its asset management unit, AIG
Investments, which has about $100 billion under
management, and the insurer expects to get as much as $500 million for
the asset. There were rumors that Macquarie Group Ltd. was finalizing a bid for the unit, The Australian reports. Others interested in the unit are thought to include Ashmore
Investment Management Ltd., Hellman & Friedman LLC, Rhone Group LLC
and TA Associates, as well as mutual fund manager Franklin Templeton
Investments and asset manager Southgate Alternative
Investments, according to the Wall Street Journal. Religare Enterprises has also bid for AIG Investments, according to the Journal. The unit was expected to get bids
anywhere between $400 million and $800 million. AIG had originally
hoped to finish the sale by the end of May, according to reports, but
the process could run longer.
- AIG's Advisor Group division, housed within AIG's
retirement services division, which consists of three broker-dealers --
SagePoint Financial Inc. of Phoenix, FSC Securities Corp. of Atlanta
and Royal Alliance Associates Inc. of New York -- could sell for about
$200 million. Private equity firms Clayton, Dubilier & Rice Inc.
and Warburg Pincus have dropped out of the bidding for the division, leaving GTCR Golder Rauner LLC and several new bidders,
The Deal's Michael Rudnick reported. However, the three broker-dealers have lost nearly 14% of their advisers since February.
- The sale of AIG's aircraft leasing unit, International Lease Finance Corp., or ILFC, could be finished soon. The Financial Times
is reporting that the insurer has received second-round bids from
private equity firms Thomas H. Lee Partners and Carlyle Group, Onex
Corp. and Greenbriar Equity Group, as well as an unidentified third
bidder. As Dealscape
previously noted, ILFC has a book value of $7.5 billion as of Sept. 30,
and bids were supposed to come in at around $5 billion. However, Reuters
is reporting that the unit may sell for under $5 billion. The figure is
not surprising considering AIG needs to repay $100 billion in debt and
does not have the cash to meet debt obligations of $33 billion for
ILFC's operations in 2009 due to the struggling airline business
and loss of its federal commercial paper lending facility after key
credit ratings were cut. The FT reported that the
government may even extend AIG a $5 billion loan to divest ILFC, which
should just about cover the purchase for the private equity firm that
decides to buy the unit. The credit line would come from the $180
billion bailout the government has already extended to the insurer.
- The AIG Global Real Estate fund management business
has around $12.4 billion in assets and $5.2 billion in equity capital.
The unit could be sold
for about $9 billion. Interested bidders could include BlackRock Inc.
and Blackstone Group LP (which might be a conflict because Blackstone
is advising). Included in that is its Japanese headquarters in Tokyo,
which may bring in more than $1 billion.
- AIG Edison Life Insurance Co. and AIG Star Life Insurance
Co. are also up for sale. Bidders could include: Prudential Financial
Inc., Manulife Financial Corp., Allianz Group, Aegon NV, Nippon Life
Insurance Co., Tokio Marine Holdings Inc., Gibraltar Life Insurance Co.
Ltd., T&D Holdings Inc. and Manulife Life Insurance Co. The value
is estimated to be around $1 billion.
AIG plans to repay the government within three to five years. Part of that repayment will be an IPO of American International Assurance Co., which will be taken public in 2010. - Maria Woehr For more see: I-banks line up for AIG Hong Kong IPO
AIG speeds up spinoff of crown jewels
AIG to repay bailout in three to five yearsAIG Dealwatch
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