March 10, 2010 > AIG to get $231M if sale of Asian unit crumbles
AIG to get $231M if sale of Asian unit crumbles
Submitted By AP Wire Service
NEW YORK (AP), Mar 06 - American International Group Inc. will receive a termination fee of $230.6 million if the sale of its Asian life insurance business to Britain's Prudential PLC falls through.
In a filing with the Securities and Exchange Commission late Friday, AIG said the deal, announced March 1 and given the go-ahead by the U.S. government, still requires regulatory and shareholder approval.
The sale of American International Assurance Co., or AIA Group Ltd., is expected to net AIG $25 billion in cash and $10.5 billion in securities. It's the largest in a series of deals in AIG's efforts to restructure and pay off its $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 $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 $15 billion Alico sale was cleared this week 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 eventually cover the Federal Reserve Bank of New York's $47.9 billion investment in the company.
AIG's debt to the government also includes $47.3 billion owed the U.S. Treasury and $34.5 billion in outstanding aid tied to the value of investments the New York Fed bought to prop up AIG.