AIG To Unload Philippine Unit To Pay Off Debt

Manila, Philippines (AHN) - American Insurance Group (AIG) is selling its Philippine unit, the Philippine-American Life General Insurance Co., (PhilamLife), even as the company assured its customers there is no need to worry.

Jose Cuisia, chief executive officer of PhilamLife said at least 10 foreign and local companies have already expressed an interest in acquiring the unit, although he would not disclose any details.

In a news conference, Cuisia said AIG has decided to sell its Philippine unit to pay off an $85 billion loan package extended by the U.S. Federal Reserve Bank to help the company stay afloat.

He said, "They have to sell some of the valuable assets to generate that kind of money. This is the reason why Philamlife is being sold to the public."

He, however, assured PhilamLife clients that the company, which is involved in insurance, financing, and banking, is capable of paying claims and underwriting new policies despite the troubles of its parent company, AIG.

Cuisia put the Philippine unit's net worth at $1.05 billion and assets totaling $3.7 billion in the Philippines. PhilamLife has interests in banking, mutual funds, pre-need and non-life insurance, it has been a leader in the industry for the past 61 years.

As the leader in the local insurance industry, Cuisia said the decision by AIG to unload its local unit is an opportunity for local investors to acquire the blue chip insurer he described as a "trophy company."

Investment banks JP Morgan and Blackstone have been hired by AIG to advise on the sale of the local unit. The two advisers will assist AIG on deciding whether to sell PhilamLife as a whole or part by part.

"I look at this also as a positive because this is an opportunity for local groups within the Philippines to own a trophy company like PhilamLife. While it was unimaginable in the past that Philamlife would be owned by local interest, there is now a unique opportunity," he said.