American International Group Inc. (NYSE: AIG) is selling a number of its divisions in an effort to raise capital to repay the huge US government loan, which gave the company an $85 billion two-year credit line in exchange for warrants for a 79.9% equity stake, nationalizing the company. JP Morgan Chase Inc. (NYSE: JPM) and Blackstone Group will handle the sales.
AIG did not specify which divisions will be sold or how much it is asking for them, but it reportedly plans to keep its US life and property insurance businesses and general insurance businesses and partnerships life insurance activities in other countries.
AIG's restructuring is not expected to affect the ownership structure of AIG Israel Insurance Company Ltd., owned in equal shares by AIG and Aurec. AIG Israel general manager Hava Friedman-Shapira said, "The announcement strengthens AIG Israel's position as the leading insurance company in a range of fields. There has been no change in AIG Israel's business, in any sector, and none is expected."
Aurec told "Globes" that it has no plans to sell its stake in AIG Israel.
AIG Israel has licenses to provide life and general insurance.
Published by Globes [online], Israel business news - www.globes-online.com - on October 5, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008