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AIG will not exist in four years, says chairman
American International Group – the beleaguered insurer at the centre of a $165m (£117m) bonus row – will not exist within four years as the man brought in to restructure the business moves to break it up.
By James Quinn
Last Updated: 11:42AM GMT 19 Mar 2009
Chairman Ed Liddy, brought in to restructure AIG following the US government’s initial $85bn bail-out last September, intends to break it up in such a way that it will be unrecognisable when compared to the complex web of insurance and financial product businesses that it consists of today.
His actions are intended to create enough capital to pay the US government the $173bn it now owes as a result of a number of further bail-outs, something he still thinks will be possible in spite of the dislocation in the credit markets.
Mr Liddy’s attempts to break up AIG have intensified in recent days following pressure from Treasury Secretary Tim Geithner as a result of the growing row surrounding the bonus payments to the company’s 400-man Financial Products team, the division which was largely responsible for the insurer’s near-downfall.
The former AllState chairman – who came out of retirement to attempt to save AIG on behalf of the American taxpayer – and his senior lieutenants will accelerate the sale of those businesses already earmarked for sale, consider the sale of some others, rebadge those that remain and hand over any troublesome assets to the US Treasury to be wound down.
Mr Liddy, who works for a salary of $1 a year and does not have any form of bonus package, said that he hoped the troublesome Financial Products division could possibly one day be floated on the public markets or at least rehabilitated in such a way that a minority stake might be sold.
For the AIG businesses that remain, Mr Liddy admitted before Congress on Wednesday that the AIG name is so “tainted” that it will have to be rebranded in some way so as to rebuild public confidence in the underlying insurance businesses.
As part of the break-up process, the company has already begun a process to sell its 66-storey headquarters in New York’s financial district and another 16-storey building on Wall Street which are connected by an aerial walkway. The properties are thought to have been worth approximately $315m before the recession, but it is not known what their value might be today.
AIG will not exist in four years, says chairman - Telegraph
American International Group – the beleaguered insurer at the centre of a $165m (£117m) bonus row – will not exist within four years as the man brought in to restructure the business moves to break it up.
By James Quinn
Last Updated: 11:42AM GMT 19 Mar 2009
Chairman Ed Liddy, brought in to restructure AIG following the US government’s initial $85bn bail-out last September, intends to break it up in such a way that it will be unrecognisable when compared to the complex web of insurance and financial product businesses that it consists of today.
His actions are intended to create enough capital to pay the US government the $173bn it now owes as a result of a number of further bail-outs, something he still thinks will be possible in spite of the dislocation in the credit markets.
Mr Liddy’s attempts to break up AIG have intensified in recent days following pressure from Treasury Secretary Tim Geithner as a result of the growing row surrounding the bonus payments to the company’s 400-man Financial Products team, the division which was largely responsible for the insurer’s near-downfall.
The former AllState chairman – who came out of retirement to attempt to save AIG on behalf of the American taxpayer – and his senior lieutenants will accelerate the sale of those businesses already earmarked for sale, consider the sale of some others, rebadge those that remain and hand over any troublesome assets to the US Treasury to be wound down.
Mr Liddy, who works for a salary of $1 a year and does not have any form of bonus package, said that he hoped the troublesome Financial Products division could possibly one day be floated on the public markets or at least rehabilitated in such a way that a minority stake might be sold.
For the AIG businesses that remain, Mr Liddy admitted before Congress on Wednesday that the AIG name is so “tainted” that it will have to be rebranded in some way so as to rebuild public confidence in the underlying insurance businesses.
As part of the break-up process, the company has already begun a process to sell its 66-storey headquarters in New York’s financial district and another 16-storey building on Wall Street which are connected by an aerial walkway. The properties are thought to have been worth approximately $315m before the recession, but it is not known what their value might be today.
AIG will not exist in four years, says chairman - Telegraph
