AIG hit with a $1.9bn loss on Fortress

first_img Tags: NULL Share AMERICAN International Group (AIG) said yesterday it will sell most of its consumer finance unit to Fortress Investment Group and take a $1.9bn (£1.2bn) pre-tax loss due to the sale.AIG, majority owned by the US government, is selling 80 per cent of American General Finance to Fortress managed funds and affiliates as it restructures after a bailout.It did not disclose terms of the deal.AIG will own the 20 per cent of the group that it did not sell to Fortress, but said the unit will not be included in its financial statements. The companies expect the deal to close by the end of the first quarter of 2011.Fortress, one of only a few publicly traded hedge fund groups, was involved in a similar deal earlier this year when some of its funds bought European assets from Ally Financial’s Residential Capital unit.It has made other recent acquisitions. It bought bond manager Logan Circle Partners for $21m and announced a deal in July for loan servicing firm CWCapital.Fortress’s share price has been a disappointment for investors since it debuted at $18.50 in 2007. Yesterday, after the AIG deal was announced, the share price fell 4.5 per cent to $4, making it the industry’s worst performer for the day.AIG, once the world’s largest insurer, nearly collapsed in September 2008 from credit default swaps that left it on the hook for tens of billions of dollars in payouts to some of the biggest US and European banks.It has been selling assets to repay taxpayers, to whom it still owes more than $100bn.American General Finance, which provides loans to people in the United States, Puerto Rico, the Virgin Islands and the United Kingdom, has assets of about $20bn and liabilities of about $18bn. It reported an operating loss of $11m for the second quarter on Friday, compared with a loss of $202m a year ago. The loss narrowed because of a drop in the provision for loan losses due to favorable trends in credit quality. whatsapp KCS-content whatsapp More From Our Partners A ProPublica investigation has caused outrage in the U.S. this weekvaluewalk.comKiller drone ‘hunted down a human target’ without being told tonypost.comPolice Capture Elusive Tiger Poacher After 20 Years of Pursuing the Huntergoodnewsnetwork.orgI blew off Adam Sandler 22 years ago — and it’s my biggest regretnypost.comRussell Wilson, AOC among many voicing support for Naomi Osakacbsnews.comFlorida woman allegedly crashes children’s birthday party, rapes teennypost.comAstounding Fossil Discovery in California After Man Looks Closelygoodnewsnetwork.orgNative American Tribe Gets Back Sacred Island Taken 160 Years Agogoodnewsnetwork.orgBrave 7-Year-old Boy Swims an Hour to Rescue His Dad and Little Sistergoodnewsnetwork.orgMatt Gaetz swindled by ‘malicious actors’ in $155K boat sale boondogglenypost.comPuffer fish snaps a selfie with lucky divernypost.comUK teen died on school trip after teachers allegedly refused her‘The Love Boat’ captain Gavin MacLeod dies at 90nypost.comInside Ashton Kutcher and Mila Kunis’ not-so-average farmhouse estatenypost.comBiden received funds from top Russia lobbyist before Nord Stream 2 giveawaynypost.comSupermodel Anne Vyalitsyna claims income drop, pushes for child supportnypost.comMark Eaton, former NBA All-Star, dead at 64nypost.comFeds seized 18 devices from Rudy Giuliani and his employees in April Show Comments ▼ AIG hit with a $1.9bn loss on Fortress Wednesday 11 August 2010 7:47 pmlast_img