The new chairman and CEO of AIG, Edward Leddy, disclosed in an analysts conference call on Friday, October 3, that the company has begun a broad initiative to shrink the company and improve its capital structure by selling assets to help pay back the current $61 billion in Federal Reserve Bank loans that it had borrowed as of September 30 which it needed to stave off collapse two weeks prior.
Leddy said AIG is “exploring divestiture opportunities for our businesses,” will follow what he called a “deliberate process”–its advisors for the asset sale are the Blackstone Group and JPMorgan–and that it hoped to sell a broad range of businesses and use the proceeds to “repay our obligations to the Government,” which AIG must do within two years, and “address our capital structure.”