Financial turmoil may delay AIG's plan to sell assets
Updated: 2008-12-12 07:33
By Kwong Man-ki(HK Edition)
|
|||||||
American International Group (AIG) may have to delay it asset sales plan because of the difficult market condition, the group's chief executive said in Hong Kong.
Edward Liddy, chief executive of AIG, said that the company's assets, including American Life Insurance Co (Alico), are high quality units. Companies considering expanding their business in Asia should be interested, he added.
Earlier this week a media report said that insurance companies AXA SA, MetLife Inc, Prudential Plc and Chinese sovereign wealth fund CIC held separate talks with AIG about buying Alico.
However, "these are challenging times to undertake divestitures," Liddy said in his speech at the American Chamber of Commerce in Hong Kong yesterday.
Liddy said that the pace and order of the asset sales may change, and the announcements on certain transactions may take a couple of months or longer.
He said he will meet potential buyers, regulatory authorities and investment banks in his visit to Asia, but no decision is expected to be made on asset sales.
However, the division International Lease Finance Corp was singled out, as Liddy said there is great interest in the unit, which leases aircraft.
Liddy, who will visit Singapore and Tokyo shortly, was also to speak to the AIG employees in Hong Kong on running the sale of its unit. He stressed that there was no dire need for AIG to sell the assets, though the company hopes to lower the gearing ratio and pay some money back to the taxpayers.
The need to post increasing amounts of collateral to counter parties for guarantees on toxic mortgage securities left AIG with deep losses over the last four quarters. The US government saved AIG from bankruptcy in September with a rescue plan that has since ballooned to about $152 billion. The insurer, thus, is forced to sell stakes in units scattered around the world.
Asked when the AIG would repay the $152 billion loan, Liddy said the company has not taken the entire amount, rather the US government has loaned it $40 billion, which could grow to $60 billion.
In response to a question about the leadership of former AIG CEO Maurice "Hank" Greenberg, Liddy said Greenberg built an awesome company, but stayed too long.
"Anyone who runs a company for 35 years may have stayed too long, and didn't keep us contemporary in terms of risk measures," he said.
(HK Edition 12/12/2008 page2)