AIG to get US$231m fee if AIA deal to Pru fails
Source: Agencies |
March 8, 2010, Monday
|
Print Edition
Print Edition
AMERICAN International Group Inc will receive a termination fee of US$230.6 million if the sale of its Asian life insurance business to Britain's Prudential Plc falls through.
In a filing with the US Securities and Exchange Commission late Friday, AIG said the deal, announced on March 1 and given the go-ahead by the US government, still requires regulatory and shareholder approval.
The sale of American International Assurance Co, or AIA Group Ltd, is expected to net AIG US$25 billion in cash and US$10.5 billion in securities. It's the largest in a series of deals in AIG's efforts to restructure and pay off its US$182.5 billion rescue package from the government.
The cash portion of the sale would let AIG pay back nearly 20 percent of the almost US$130 billion in bailout money still outstanding.
Separately, the New York-based insurer is expected to announce the sale of its American Life Insurance Co, or Alico, to MetLife Inc in coming days. One hurdle for the projected US$15 billion Alico sale was cleared earlier when the Internal Revenue Service issued a favorable ruling on a tax question, The Wall Street Journal reported.
MetLife confirmed last month it was in talks to buy Alico, an international life and health insurance business that operates in more than 50 countries.
The two deals could give AIG enough to cover the Federal Reserve Bank of New York's US$47.9 billion investment in the company.
AIG's debt to the government also includes US$47.3 billion owed the US Treasury and US$34.5 billion in outstanding aid tied to the value of investments the New York Fed bought to prop up AIG.
In a filing with the US Securities and Exchange Commission late Friday, AIG said the deal, announced on March 1 and given the go-ahead by the US government, still requires regulatory and shareholder approval.
The sale of American International Assurance Co, or AIA Group Ltd, is expected to net AIG US$25 billion in cash and US$10.5 billion in securities. It's the largest in a series of deals in AIG's efforts to restructure and pay off its US$182.5 billion rescue package from the government.
The cash portion of the sale would let AIG pay back nearly 20 percent of the almost US$130 billion in bailout money still outstanding.
Separately, the New York-based insurer is expected to announce the sale of its American Life Insurance Co, or Alico, to MetLife Inc in coming days. One hurdle for the projected US$15 billion Alico sale was cleared earlier when the Internal Revenue Service issued a favorable ruling on a tax question, The Wall Street Journal reported.
MetLife confirmed last month it was in talks to buy Alico, an international life and health insurance business that operates in more than 50 countries.
The two deals could give AIG enough to cover the Federal Reserve Bank of New York's US$47.9 billion investment in the company.
AIG's debt to the government also includes US$47.3 billion owed the US Treasury and US$34.5 billion in outstanding aid tied to the value of investments the New York Fed bought to prop up AIG.
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