AIG (NYSE:AIG) Continues to Sell Assets to Raise Capital

The latest move to raise capital by AIG (NYSE:AIG) is to sell its Nan Shan Life Insurance unit, based in Taiwan. They face uncertainties there as the consortium agreeing to buy the unit lacks experience in insurance, generating the question of whether or not regulators in the country will approve the deal.

Canaccord says, "The recovering insurance giant continues on its quest to raise capital by divesting many of its operating units. In the latest move, the company has agreed to sell its Taiwan unit, Nan Shan Life Insurance, for $2.16 billion in order to help it repay money it owes the U.S. government. The consortium, which includes Taiwan's Ruentex Group, won out over three financial holding companies from the island. But the buyers’ lack of experience in operating insurance companies may raise concerns from Taiwan’s financial regulator. The regulator has blocked an earlier attempted sale of Nan Shan. Taiwan's Financial Supervisory Commission (FSC) said it would "cautiously review" the bid. According to The Wall Street Journal, the FSC has said previously that its approval of a potential deal will depend on whether a buyer has sound financing and insurance experience, will look after policyholders and staff, will make a long-term commitment to the company and can meet future funding needs. "The participants in the consortium enjoy an excellent reputation in Taiwan," AIG President and Chief Executive Robert Benmosche said in a statement. The Ruentex Group bought a 20% stake in ING Groep NV's life-insurance unit in Taiwan in 1986 but sold its entire stake back to ING in 2001. Regulators will likely contemplate whether an ownership stake constitutes operational experience. The consortium has agreed to keep the current management team and the Nan Shan brand, AIG said."

AIG was trading at $57.90, down $0.50, or 0.86 percent, as of 1:49 PM EST.