AIG Inc has dropped plans to sell two Japanese subsidiaries, according to a published report, deciding the company will derive more value from holding on to them.
The struggling insurer announced a year ago it would sell three of its Japanese life insurance businesses to help pay off an US$85 billion government loan that helped keep it from collapsing as the credit crisis deepened.
But with the company’s financial picture improving and few viable buyers coming forward, AIG says it will hold on to AIG Star Life Insurance Co and AIG Edison Life Insurance Co, according to a report posted on the Wall Street Journal’s Web site on Saturday.
AIG is still considering a sale or a spinoff of a third subsidiary, Alico Japan.
“I have come to believe that we can obtain the greatest value for AIG Star and AIG Edison by continuing to operate and grow these companies as part of AIG,” CEO Robert Benmosche told the Journal.
The company signaled in August that it would not rush into sales, revealing in a securities filing that it intends to “maximize the value of its businesses over a longer time frame.”
That came as AIG was reporting its first quarterly profit since 2007.
Separately, the New York Times reported that an AIG policyholder in California has asked a judge for an injunction that would bar the company from moving assets there out of the state, potentially disrupting AIG investments elsewhere.
The policyholder, Linda Harris, is also a financial planner who had recommended AIG annuities to clients before the company’s financial woes came to light last year, the Times reported.
In a filing on Friday in California Superior Court for the County of Los Angeles, Harris said AIG “continues to engage in unlawful, fraudulent and unfair business practices.”
The Times reported that AIG spokesman Mark Herr said, “We believe that there is no merit to the motion, and we will continue to defend ourselves against these spurious assertions.”
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