AIG Negotiating Over Transatlantic Re And Aircraft Operations
May 07 2009 - 5:50PM
Dow Jones News
As it struggles to sell or spin off its varied businesses,
American International Group Inc. (AIG) is also struggling to
retain customers amid public anger over retention bonuses it paid
to some employees after the company took billions in government
aid.
But negotiations are moving forward over a resolution of its
aircraft leasing business International Lease Finance Corp. and its
stake in Transatlantic Re, said Pauls Rosput Reynolds, AIG's chief
restructuring officer, during the company's first quarter
conference call Thursday.
David Herzog, AIG's chief financial officer, said that customer
retention slipped around the time of public hearings over bonuses
AIG paid to executives in its loss-plagued Financial Products unit,
but had since improved.
AIG posted its lowest loss in six quarters, reporting a $4.4
billion deficit in the first quarter that reflected ongoing hits to
its investments and stiff challenges facing its insurance
companies.
Leading up to Thursday, AIG had posted five consecutive
quarterly losses totaling more than $100 billion since its last
profitable period, the third quarter of 2007. Each one of those
five prior losses had topped $5 billion, with the largest, nearly
$62 billion, coming in the fourth quarter of last year. The latest
results included $1.9 billion in charges tied to the wind down of
the Financial Products group, whose problems pushed the company to
the brink of bankruptcy, and $2.5 billion in investment losses.
Operating income at AIG's general-insurance business dropped by 72%
amid investment losses, while life-insurance and
retirement-services profits dropped to $1.2 billion amid lower
assets under management and losses on partnership investments. The
government rescued AIG last September, and has committed up to
$173.3 billion to the bailout. Taxpayers got a nearly 80% stake in
the company in exchange. Shares of AIG traded down 2% in
aftermarket trading at $1.91 a share.
-By Lavonne Kuykendall, Dow Jones Newswires; (312) 750 4141;
lavonne.kuykendall@dowjones.com
(Liam Pleven and Lauren Pollock contributed to this report.)