AIG to Sell Off Business Units

CHARLOTTE, N.C. – The insurer American International Group Inc. said it plans to sell off a number of business units to pay off its massive government loan.

The announcement Friday was expected by Wall Street. But it now leaves investors wondering how much AIG will be able to raise from the sales.

On the brink of failure last month, AIG was bailed out when the government offered it an $85 billion loan during the ongoing credit crisis that saw Lehman Brothers Holdings Inc. file for bankruptcy protection and the sale of Merrill Lynch & Co. to Bank of America Corp. In return for the loan, the government received warrants to purchase up to 79.9 percent of AIG.

Shortly after the deal, newly appointed Chairman and Chief Executive Edward Liddy said he planned to quickly raise funds through asset sales, but hoped to hold on to as many of AIG’s insurance operations as possible.

AIG, one of the world’s biggest insurers, Friday didn’t specifically disclose all the assets it would sell or the expected prices from the sales. However, the New York-based insurer said it plans to retain its U.S. property and casualty and foreign general insurance businesses, and also plans to retain an ownership interest in its foreign life insurance operations.

Liddy, former CEO of Allstate Corp., said AIG has been contacted by “numerous” parties regarding possible sales of businesses, and AIG will try to sell its operations to “brand-name” buyers who have strong ratings and balance sheets.

– From staff and wire reports

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