AIG has to move fast because it has a short window to repay the emergency government aid and prevent Washington from taking full control of the company.
No final decisions on the asset sales have been made. What is actually sold is not as simple as AIG putting up a for sale list.
Among the units that AIG most want to sell are International Lease Finance Corp – one of the world’s largest aircraft leasing companies, its 59 per cent stake in Transatlantic Holdings, a listed reinsurer, and its huge property portfolio and private equity investments.
AIG want to keep core businesses including its international life insurance, US general insurance units and US pension businesses. The core ones also include insurance businesses in Asia, Europe and the UK.
But the problem is that some of the ones it most wants to sell are the ones heavily affected by events of recent weeks. Insurers are circling like vultures for what they see as good long-term profitable units – and the golden ones here are the non-US insurance ones.
With time ticking away, what will be sold will depend on what assets will get the right price. It will also depend on which potential buyers can themselves raise, or have available, funds to complete the sale in a hurry.
Life insurance: News update: September 2008