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AIG likely to sell Philam in 6 to 9 months

abs-cbnNEWS.com | 10/07/2008 1:09 PM

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Beleaguered global insurer American International Group (AIG) is likely to sell its valuable assets, including its local subsidiary, Philippine American Life and General Insurance Co (Philamlife), within six to nine months, an AIG official said Tuesday.

Brian Murray, AIG's Managing Director for Research in Asia, who was in Manila for a conference organized by the Management Association of the Philippines, said AIG is hoping to sell its life insurance and other profitable businesses in the US and overseas soon.

"The asset sale process is gonna be about 6 to 9 months," he told reporters. "We hope to do that sooner lather than later."

AIG is selling various valuable worldwide assets outside its property and casualty insurance business, including Philamlife, to pay off its expensive $61 billion debt to the US government. The emergency loan kept AIG, once the world’s largest insurer, from going under after toxic mortgages led to massive losses.

Philamlife and other AIG insurance business units and subsidiaries are financially sound, but a branch of the parent company made unwise forays into the risky subprime mortgage market and financial products based on it.

AIG has enlisted Blackstone Group LP and J.P. Morgan Chase & Co as the global coordinators for the divestiture program.

Philamlife and its own subsidiaries, which are engaged in banking, asset management and outsourcing, have total assets of P170 billion and consolidated networth of P49.5 billion. Philamlife's life insurance unit has been the industry leader for six decades. 

Jose Cuisia, chief executive of Philamlife told a press conference on Monday that “close to 10 groups,” both foreign and local, have directly communicated with him to express their interest to buy a stake in the country’s leading life insurer.

So far, only the Yuchengco group has admitted they are interested in a stake in Philamlife. 

Cuisia continued to appease nervous or concerned policy holders and clients by stressing that Philamlife itself is financially sound and stable. -- with reports from Judith Balea, abs-cbnNEWS.com

 

as of 10/07/2008 1:12 PM