Thursday December 11, 08:45 AM
AIG faces tough selling climate to pay back US govt loan: CEO
HONG KONG (AFP) - The head of troubled insurance behemoth AIG said Thursday that tough economic conditions would make it difficult to sell off assets in order to pay back a giant US government loan.
However, Edward Liddy, chairman and chief executive officer of the US firm, said it was determined to push through with its disposal of non-core assets, as it grappled to pay back part of the 150 billion dollar rescue package.
"These are challenging times to undertake divestitures and it's quite possible that the pace or order of our divestitures will change," he said in Hong Kong, in a speech to the American Chamber of Commerce.
"Nevertheless, I have made the very public commitment that we will pay down the entirety of the amounts we have borrowed from the US taxpayers."
Liddy said the firm, whose full name is American International Group (NYSE: AIG - news) , had used around 30 billion dollars of a 60 million dollar loan facility, put together to rescue what was previously the world's biggest insurance firm.
The rest of the 150 billion dollar package would be used to help dispose of the toxic assets from the firm's heavy involvement in complex financial products linked to the US housing market.
Liddy said there had been strong buyer interest in AIG's International Lease Finance Corp, an aircraft leasing company.
"There has been great interest and great demand for people who want to buy that business," he said.
He confirmed that the company was also looking to sell stakes in American International Assurance Company Limited (AIA), southeast Asia's leading life insurer, and American Life Insurance Company, or Alico (NASDAQ: ALCO - news) , which has large operations in Japan, as well as other subsidiaries.
But he said that the size of the companies meant such sales could not be rushed.
"I caution you, given the size and complexity of our businesses... please recognise that announcements on these businesses are a couple of months or more into the future," he said.
Liddy said a report in the Wall Street Journal that the company owed an additional 10 billion dollars to financial firms on speculative trades that turned sour was "nothing new" and the firm had already declared the exposure.
Liddy was brought out of retirement to take the helm of the troubled firm, which was rescued from possible collapse in September.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
