GLOBAL FINANCIAL CRISIS
CHAROEN KITTIKANYA and PHUSADEE ARUNMAS
Succumbing to the US financial crisis, American International Group Inc (AIG), one of the region's leading life insurers, yesterday acknowledged it is preparing to sell its stake in its regional life insurance and consumer finance banking arms.
The company is looking for a strategic investor to hold a minority stake in Hong Kong-based AIA Holding, which owns the Thai life insurance unit American International Assurance (AIA), the country's largest life insurer, through AIA Hong Kong.
AIG is also considering selling its consumer finance businesses as part of efforts to raise funds to repay a US$85 billion government bailout.
"We anticipate it will be sold on a regional level," said Thomas White, executive vice-president and general manager of AIA Thailand.
"We are looking for a partner to support our growth in Asia. For the non-life business, we will not take any strategic partner."
AIG Retail Bank president and CEO Charly Madan said the new partner for the consumer finance business will possibly buy stakes from the group's parent firm (AIG Consumer Finance Group) and take over all the Asian operations, or it could buy the Thai unit individually.
Percentage of stakes to be sold are not yet available, but for AIA, Mr White said minority stakes could range from 1% to as much as 49%.
In Asia, AIA operates in China, Australia, Brunei, Guam, Hong Kong, India, Indonesia, Japan, Macau, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
Despite the anticipated shareholder restructuring, Mr White insisted the change would not affect the operations of AIA Thailand, adding that a new strategic partner would instead bring value to AIA Thailand.
"We confirm that AIA Thailand's assets will remain in Thailand," said Mr White. "What we are selling only is just a minority stake of the holding firm of the regional operations of AIA in Hong Kong, not assets [of AIA in particular countries].
"On top of that, AIA Thailand has no authority to sell assets or transfer any funds to help its parent without the approval of the industry's regulatory body.
"We can't sell assets, transfer any funds or even remit profits to foreign parent firms on our own," said senior vice-president and deputy general manager Anucha Laokwansatit. "They first need the approval of the regulatory body - the Office of Insurance Commission (OIC) - even for foreign investments."
Chantra Purnariksha, secretary-general of the OIC, noted yesterday the regional shareholder restructuring is unlikely to affect AIA's financial status or its policyholders.
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