AIG to announce massive restructuring
AIG, hammered by poor mortgage bets, will announce a massive restructuring on Monday. The restructure could include the sale of its $50 billion aircraft-leasing division to help provide liquidity to the company. The insurer remains exposed to subprime-backed derivative exposure and has faced massive losses in mortgage-related debt writedowns. The company is also facing pressure from a tanking stock rating and a threat to its ratings by the major Wall Street rating agencies.
More about the AIG restructuring from CNNMoney.com:
American International Group, the nation’s largest insurer, plans to unveil a restructuring plan that will include selling off part of its business to raise cash and boost investors’ confidence, according to a published report.
The company is likely to dispose of its aircraft-leasing arm, International Lease Finance Corp., which has a fleet of more than 900 airplanes valued at more than $50 billion, the Wall Street Journal reported Sunday.
The aircraft unit is the largest single customer of both Boeing Co. (BA, Fortune 500) and European Aeronautic Defence & Space Co.’s Airbus.
The ailing company, which had planned to announce a turnaround strategy on Sept. 25, is being forced to accelerate the announcement after investors fled the stock last week.
Shares fell 31% on Friday after plummeting earlier in the week. The company’s stock is down a total of 79% this year.
Late Friday, credit rating agency Standard & Poor’s warned that it might downgrade AIG’s debt.