AIG seeks more aid on $60 billion loss fears
AIG, the insurance giant that has been twice rescued by the US Government, is looking for fresh state funding as it prepares to post one of the biggest losses in corporate history.
The group, one of the most high profile casualties of the credit crunch, is believed to be talking with the Government about the possibility of securing fresh finance and trading debt for equity. It is already 80 per cent state-owned.
A fresh bailout package would help the business, whose collapse could have sparked tumult in world markets by dragging down much of America's banking system, to mop-up an expected record fourth-quarter loss of as much as $60 billion.
The figure would dwarf Time Warner's $54 billion quarterly loss in 2002 and AIG's own $24.5 billion loss in the third quarter.
New finance would also give the group, which reports fourth-quarter figures on Monday, time to sell assets.
AIG became one of the biggest losers of the credit crunch last summer after bad bets linked to the sub-prime housing market brought it to its knees.
Its UK operations are being investigated by the Serious Fraud Office, which is working in co-operation with the American authorities.
The American Government provided an $85 billion rescue package in September, only to rush to the group's aid a second time in November with a fresh $150 billion bailout.
In turn, AIG, whose New York Stock Exchange-listed shares closed yesterday down 1 cent at 53 cents, has been forced to sell a raft of assets.
It plans to dispose of at least ten businesses including its International Lease Finance aircraft leasing unit and American General Finance, the consumer lender.
Despite its frail state, the group was said today to have attracted two offers for a key insurance unit. MetLife is said to have lodged a preliminary offer of $11.2 billion for American Life Insurance Co. Axa has also lodged an offer, although its bid is said to exclude the division's Japan operation, its biggest market.
Responding to news of the fresh Government talks, which were first aired on CNBC, AIG said in a statement: "AIG has not yet reported fourth-quarter and 2008 year-end results.
"We continue to work with the US Government to evaluate potential alternatives for addressing AIG's financial challenges. We will provide a complete update when we report financial results in the near future."
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