Drea Knufken
AIG took a big step today towards spinning off AIU Holdings, its property-casualty arm. AIG formed a special-purpose vehicle intended to hold AIU Holdings’ equity, rebranded the company as Chartis Insurance, and hired Kristian P. Moor as President/CEO, according to a press release. These actions gear it up for a possible IPO.
Reuters’ Matthew Goldstein has more:
AIG said it had formed a special-purpose vehicle that will consist of Chartis’ commercial insurance, foreign general insurance, and private client group businesses.
Kristian Moor was named CEO of the unit. He was previously president and retains that title.
Effective immediately, the company will use the Chartis name in place of most property-casualty branding that was previously “AIG” or “AIU,” the name long used by AIG’s property-casualty businesses outside the United States. The company undertook the rebranding to distance the unit from the problems of parent company AIG.
Plans to separate the property-casualty businesses from AIG were announced in March, after New York-based AIG lost more than $99 billion in 2008. The division, in contrast, was profitable, earning more than $2 billion.
The company may sell as much as a 20 percent stake in the division through an IPO or in transactions with private investors. An offering could raise several billion dollars for AIG. At the end of 2008, the division was valued at about $38 billion.
AIG could use proceeds to help repay the U.S. government, which has committed up to $180 billion to rescue AIG, including about $85 billion in loans.
