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AIG Unit Purchased by Hedge Fund Manager

Source: Associated Press

Posted on 12 Aug 2010

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American International Group Inc. announced the selloff of yet another unit of the giant insurer in order to repay the taxpayer bailout. This time, an 80 percent stake in the consumer credit business of American General Finance Inc. is being sold to hedge fund manager Fortress Investment Group LLC. Financial terms of the transaction were not disclosed.

"We believe in AGF's solid business model, which is why we are retaining a 20 percent stake in the business as part of this transaction," said Robert H. Benmosche, AIG president and CEO.

American General Finance provides loans, retail financing and other credit-related products to consumers in the U.S., Puerto Rico, the Virgin Islands, and the U.K. The company has assets of about $20 billion and liabilities of roughly $18 billion, including $17 billion in debt, which will be removed from AIG's balance sheet.