(Fortune) -- AIG made the first big dent Thursday in its mountain of IOUs to taxpayers.
The New York-based insurer agreed to sell its U.S. car insurance business to a unit of Zurich Financial Services for $2 billion in cash, notes and debt assumption. The sale, which is subject to regulatory approval, is expected to close later this year, an AIG spokesman said.
The sale of 21st Century Insurance to Farmers Group comes just a month after AIG (AIG, Fortune 500) -- which has received federal assistance exceeding $182 billion since its derivatives-fueled implosion last fall -- had the terms of its federal lifeline restructured for the third time.
The company is trying to sell assets to raise cash to whittle down its gigantic obligations to the Treasury and the Federal Reserve Bank of New York. But progress has been slow. Financing for would-be buyers has been hard to come by, and Congress has been extremely critical of the ever-rising price tag of AIG's bailout.
"We are very pleased to reach agreement on a $2 billion transaction, especially in this market environment," said CEO Edward Liddy. "In addition, we are moving forward with discussions for several other transactions, and we continue to evaluate how best to assure the continued strength and success of all of AIG's businesses."
Liddy was installed last September after the government took a 79% stake in AIG in exchange for what started out as an $85 billion emergency loan. In return, AIG pledged to sell assets to raise cash that would be used to repay taxpayers.
Read more here
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment