American International Group Inc. says it is negotiating for more government help, and CNBC says AIG is about to report a $60 billion loss.
AIG, New York, has not yet reported results for the fourth quarter of 2008, says AIG spokesman Peter Tulupman.
“We continue to work with the Federal Reserve Bank of New York to evaluate potential new alternatives for addressing AIG’s financial challenges,” he says. “We will provide a complete update when we report financial results in the near future.”
CNBC said AIG’s board was scheduled to meet March 1 in hopes of hammering out an agreement with the government.
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The talks hinge on how the government can swap debt for AIG equity without violating rules that cap the government’s equity stake in AIG at 79.9%, CNBC reported.
If AIG cannot negotiate an agreement, company lawyers are preparing for the possibility of a bankruptcy filing, CNBC said.
AIG will need more cash because it is likely to report a loss of up to $60 billion, due largely to writedowns on commercial real estate and other assets, CNBC said.
The Treasury Department did not respond to requests for comment.
A spokesman for Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, says, “The Federal Reserve handled all interventions with AIG. The Federal Reserve will recommend when, and if, Congress needs to be involved.”
A spokesman for the Federal Reserve Board says the Fed will look into the issue.
The Treasury and the Fed have provided about $150 billion in assistance to AIG since Sept. 17, 2008.