AIG hits a snag in sale of Taiwan unit
AIG's plan to sell Nan Shan Life to a group of investors in Hong Kong has drawn scrutiny from Taiwan regulators.
By Andrea Tse, TheStreet.com
American International Group may have hit a snag in its effort to divest itself of a Taiwan unit.
Last month, AIG said it would sell Nan Shan Life Insurance to a Hong Kong consortium consisting of Primus Financial Holding and China Strategic Holdings. AIG assured the unit's employees and policyholders of the consortium's long-term commitment to Nan Shan.
The consortium surprised Taiwan officials when they said they would sell 30% of Nan Shan to Taipei-based Chinatrust Financial Holding before regulators could vet the deal. China Strategic would get a 9.95% stake in Chinatrust Financial as part of the plan.
China Strategic seemed to have been in a hurry to sell the unit, and that has apparently alarmed Taiwan regulatory officials. They will now investigate the company for violations of long-term investment commitments to Nan Shan, according to a Hong Kong newspaper. Taiwan's Investment Commission has returned China Strategic's application to buy Nan Shan and has asked for more documentation, the newspaper reported.
Taiwan's economics ministry has denied reports that it rejected the sale of the AIG unit to the consortium.
AIG will use proceeds from the sale to pay down loans, including its $182.3 billion government rescue package. The company recently reported a third-quarter adjusted profit of $1.9 billion, compared with an adjusted profit of $9.2 billion a year earlier.
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