AIG sells Japanese headquarters for $ 1.2 billion

 

Tuesday, May 12,2009, 11:33:07 AM   Click:

CHARLOTTE, NC - Embattled insurer American International Group Inc. said Monday the sale of its headquarters in Japan Nippon Life Insurance Co. for $ 1.2 billion in cash.

The transaction, which is among the largest sales in New York, AIG has to repay the U.S. government for its massive aid is planned for the second quarter.

The 35-year-old building is 15 stories and sits on the first property in central Tokyo near the Imperial Palace. The property consists of approximately one acre of land, the company said.

AIG in Japan, its roots date back to 1946 and the company is now the country's largest insurer.

"AIG is pleased to monetize this asset effectively as part of its restructuring effort," CEO Ed Liddy AIG said in a statement. The media have discussed last week, the possible sale of the building for approximately $ 1 billion.

In addition, an internal note of the subject line "Seizing the Future", quoted by the Wall Street Journal noted the recovery of AIG May take some time.

In a note dated April 23, an initiative under the code name "Project Destiny" to a 45 days of the examination based in New York on business of the insurer who is supposed to lead to a multi-year restructuring, report said.

AIG has received $ 182.5 billion in financial support from the government since September.

Much of the note, sent to employees by e-mail to Liddy, was an update on the project by AIG Chief Restructuring Officer Paula Reynolds, according to the document.

Draft May be discussed at a congressional hearing on AIG, scheduled for Wednesday, the report said.

AIG said spokesman Mark Herr company regularly posts "Seizing the Future" memos to employees, and a recent note to discuss efforts to restructure the company.

In an e-mail to The Associated Press, Herr noted that in December Liddy said: "The U.S. government has set a deadline of five years in our arrangements. Thus, we do not need to hold a "fire sale". So we are committed to identify buyers who honor our values and recognize the contributions of our people. "

The U.S. government provided AIG with a loan of $ 85 billion in September. As the worsening of market conditions and losses piled up to the insurer, the government revised and expanded its loan to AIG on several occasions. All loans now stands at nearly $ 180 billion, after being expanded in March when AIG reported a fourth quarter loss of $ 61.7 billion, the largest ever loss quarterly in American history.

During the first quarter, AIG said it lost $ 4.35 billion, or $ 1.98 per share, compared to $ 7.81 billion, or $ 3.09 per share, during the same quarter the last year.

As part of the series of loans, the government has also taken a stake of about 80 per cent in the insurance giant.

Since its first infusion of cash, AIG has worked towards the repayment of loan by the Government to sell the business units. The company said it intends to keep his plans to harm U.S. and foreign general insurance businesses, and foreign participation in its life-assurance business.

Last month, AIG sold its auto insurance unit, 21st Century Insurance, Zurich Financial Services Group for $ 1.9 billion. The transaction is the largest divestiture by AIG since September, and one of 11 agreements for the sale of assets has reached in recent months.

Recent media reports have said AIG May be nearing an agreement to unload its rental business aircraft, International Lease Finance Corp.

In March, AIG said that it spin off ISOCARP Holdings, its property and accident insurance business and give the company its own board of directors, management team and brand distinct from that Embattled of society, which has also been involved in the controversy surrounding the bonuses paid to employees. In April, AIG AIU Holdings transferred to what is known as a special purpose vehicle for the potential sale of part of the company.

Shares of AIG fell 11 cents, or 5.5 percent, to close at $ 1.90 Monday.