The $700b government bailout package for the financial sector has taken center stage, but it was only two weeks ago that AIG was hogging headlines as they were poised to topple. The Fed’s $85b subprime-like loan to AIG saved them…or at least bought them time to raise money. The big talk two weeks ago was that they have $1 trillion in assets and just needed time to decide what to sell so they could raise the money needed to cover a spiraling credit default swap payout problem. According to the FT, they’ve now started that process, and are looking to sell up to 15 business units to raise money:
…AIG , led by its new chief executive Edward Liddy, wanted crucial businesses such as its international life insurance unit and its US pension businesses to be at the core of the “new AIG”. But apart from those, AIG was prepared to consider selling most other operations…Among the units that are most likely to be sold are International Lease Finance Corp – one of the world’s largest aircraft leasing businesses – which is expected to fetch about $10bn. AIG’s 59 per cent stake in Transatlantic Holdings, a listed reinsurer, is also believed to be on the block, as are its huge property portfolio and private equity investments including one in London’s City Airport.
Blackstone and JP Morgan Chase are advising AIG on the deals.