Some of American International Group’s (AIG) shareholders want to help the company pay off the federal government’s US$85 billion loan and avoid ceding a majority stake in the company, the Wall Street Journal reported on Friday.
The shareholders are considering raising money, which could include bringing in other investors, according to the story on the Journal’s Web site, which cited a person familiar with the matter.
AIG, one of the world’s largest insurers, teetered on the brink of collapse early this week as it looked for fresh cash to help shore up its balance sheet, which was facing a liquidity shortfall amid the continued downturn in the credit markets. On Tuesday, the Federal Reserve agreed to provide the New York-based company with the two-year, US$85 billion package in return for a 79.9 percent stake in AIG and the ability to remove senior management.
On Thursday, AIG named former Allstate Corp chief executive officer (CEO) Edward Liddy as chairman and chief executive, replacing Robert Willumstad, who took over the company in June.
The government’s acquisition is subject to shareholder approval, as AIG noted also on Thursday in a filing with the Securities and Exchange Commission. The filing did not disclose when a vote might take place.
The shareholders’ effort is aimed at trying to make sure the government is paid back quickly, so that it won’t need to take the stake, the Journal said.
An AIG spokesman did not have an immediate comment, and a spokesman for AIG’s largest individual shareholder, former CEO Maurice “Hank” Greenberg, declined to comment.
AIG shareholders have suffered severely, largely to losses linked to the mortgage market. Its stock has fallen more than 90 percent this year.
On Friday, the stock was up with the broader market, as the government outlined bold plans to help rescue banks from billions of dollars in toxic assets. A temporary ban on short selling also helped boost financial stocks.
New York-based AIG operates a range of insurance and financial services businesses ranging from property, casualty, auto and life insurance to annuity and investment services.
The company’s problems stem from the more exotic financial products it offers, including some that insure risky debt and bonds against default. The value of those instruments, known as credit default swaps, have deteriorated amid the downturn in the credit markets over the past year.
The swaps are essentially insurance coverage to protect investors against defaulting bonds or debt.
For the three quarters ended in June, AIG lost about US$25 billion in the value of credit default swaps.
SMART MANUFACTURING: The company aims to have its production close to the market end, but attracting investment is still a challenge, the firm’s president said Delta Electronics Inc (台達電) yesterday said its long-term global production plan would stay unchanged amid geopolitical and tariff policy uncertainties, citing its diversified global deployment. With operations in Taiwan, Thailand, China, India, Europe and the US, Delta follows a “produce at the market end” strategy and bases its production on customer demand, with major site plans unchanged, Delta president Simon Chang (張訓海) said on the sidelines of a company event yesterday. Thailand would remain Delta’s second headquarters, as stated in its first-quarter earnings conference, with its plant there adopting a full smart manufacturing system, Chang said. Thailand is the firm’s second-largest overseas
‘REMARKABLE SHOWING’: The economy likely grew 5 percent in the first half of the year, although it would likely taper off significantly, TIER economist Gordon Sun said The Taiwan Institute of Economic Research (TIER) yesterday raised Taiwan’s GDP growth forecast for this year to 3.02 percent, citing robust export-driven expansion in the first half that is likely to give way to a notable slowdown later in the year as the front-loading of global shipments fades. The revised projection marks an upward adjustment of 0.11 percentage points from April’s estimate, driven by a surge in exports and corporate inventory buildup ahead of possible US tariff hikes, TIER economist Gordon Sun (孫明德) told a news conference in Taipei. Taiwan’s economy likely grew more than 5 percent in the first six months
SUPPLY RESILIENCE: The extra expense would be worth it, as the US firm is diversifying chip sourcing to avert disruptions similar to the one during the pandemic, the CEO said Advanced Micro Devices Inc (AMD) chief executive officer Lisa Su (蘇姿丰) on Wednesday said that the chips her company gets from supplier Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would cost more when they are produced in TSMC’s Arizona facilities. Compared with similar parts from factories in Taiwan, the US chips would be “more than 5 percent, but less than 20 percent” in terms of higher costs, she said at an artificial intelligence (AI) event in Washington. AMD expects its first chips from TSMC’s Arizona facilities by the end of the year, Su said. The extra expense is worth it, because the company is
The seizure of one of the largest known mercury shipments in history, moving from mines in Mexico to illegal Amazon gold mining zones, exposes the wide use of the toxic metal in the rainforest, according to authorities. Peru’s customs agency, SUNAT, found 4 tonnes of illegal mercury in Lima’s port district of Callao, according to a report by the non-profit Environmental Investigations Agency (EIA). “This SUNAT intervention has prevented this chemical from having a serious impact on people’s health and the environment, as can be seen in several areas of the country devastated by the illegal use of mercury and illicit activities,”
RSS