NAIROBI, Kenya, May 7 – American International Group Inc. (AIG) subsidiaries in Kenya, South Africa and Uganda have declared intentions to break away from their parent company in the USA, through a newly formed holding company AIU holdings by December 2009.
The newly formed holding company for general insurance businesses will be an independent entity; separate from AIG Inc. Due diligence in preparation for this move is currently ongoing.
The move seems to have been advised by the problems facing the parent company that has seen it report losses amounting to billions of dollars as a result of a mortgage scheme that went wrong in the United States.
“American International Union(AIU) Holdings, which includes AIG Kenya, AIG South Africa and AIG Uganda, will have an independent board of directors, management team and brand distinct from AIG Inc,” a statement from AIG Managing Director Kenya, Japh Olende, said.
Mr Olende explained that AIU Holdings will be transferred to a special purpose vehicle (SPV) in preparation for the potential sale of a minority stake in the business.
“This may ultimately include a public offering of shares depending on market conditions,” he said.
AIG intends to contribute the equity of AIU Holdings into the SPV in exchange for preferred and common interests in the SPV.
“The step will enable our already financially strong African operations to be established as independent businesses,” Mr Olende said.
The AIU Holdings companies have maintained a track record of profitable operations, operating in 130 jurisdictions, with $32.1 billion in gross premium and $38.1 billion in equity.
AIG Kenya is a majority-owned subsidiary of the American Underwriters (AIU). AIU is a subsidiary of American International Group, Inc – AIG Inc.
American International Underwriters (AIU) is a global, preeminent network of international property-casualty (P&C) operations.
The AIG Africa set of companies, which include AIG South Africa Ltd, AIG Kenya Insurance Company Ltd and AIG Uganda Ltd are wholly owned subsidiaries of American International Underwriters Overseas Limited, a member of the Foreign General Insurance operations which are AIG’s International insurance operations.