Canadian Underwriter

Sales, Stumbles Continue for AIG


March 25, 2010   by Terri Goveia


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AIG continues to shed holdings as it streamlines operations—its Colombian-based consumer finance operations are the latest businesses on the block, the company announced July 1.

The insurer has agreed to sell 100% of its ownership interests in Inversora Pichincha S.A. and Interdinco S.A. to Ecuador’s Banco Pichincha S.A. and other parties, pending approval. Inversora Pichincha S.A. provides vehicle financing, personal and commercial loans and insurance premium financing to roughly 140,000 customers. AIG did not release any details about the agreement.

While moving forward with its plans to restructure and focus on its core business—AIG also finalized the sale of its U.S. personal auto business to Farmers’ Group Inc. on July 2—the company had its share of challenges: its stock dropped by roughly 20% July 1 following the company’s annual shareholder meeting June 30. The shareholders approved a reverse-stock split of AIG’s outstanding common stock at a ratio of one-for-twenty. On the same day, the NYSE mistakenly posted a notice of suspension and delisting for the company on its website, later correcting and apologizing for the error.

During the June 30 meeting, the shareholders also approved other measures, boosting the number of authorized shares of preferred stock from 6 million to 100 million shares, and gave the go-ahead for certain series of preferred stock issued to the U.S. Treasury Department to rank senior to all other preferred stock.  They also voted in a new slate of directors for AIG’s board.

However, the shareholders rejected proposals surrounding executive compensation upon termination and those pertaining to special shareholder meetings.

This story was originally published by Canadian Insurance Top Broker.


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