American International Group is expected to post a first-quarter loss on Thursday, but the embattled insurer's results will not trigger a new capital injection from the U.S. government this time, a source familiar with the matter said on Monday.
By Paritosh Bansal
The loss in the first quarter is expected to be significantly lower than its record fourth-quarter loss of $61.7 billion (41.1 billion pounds), the source said, adding that there would be new bailout announced with the results.
The source declined to be named because the results haven't been announced yet. AIG could not immediately be reached for comment.
This would be the first quarterly results announcement since AIG's September rescue the government did not step in to aid the insurer. It would also be AIG's sixth consecutive quarterly loss, with the last five already adding up to more than $100 billion.
AIG's fourth-quarter loss was the largest quarterly loss in U.S. corporate history and was announced in March along with a revised bailout package, which included a new $30 billion lifeline for the troubled insurer among other terms.
Investment losses, writedowns and restructuring charges were the largest drivers of the fourth-quarter loss, more than wiping out operating profits posted by its insurance subsidiaries.
AIG posted a net loss of $24.47 billion in the third quarter, which too was accompanied by an easing of the terms of the bailout. It posted a net loss of $7.8 billion in the first quarter of last year.
Overall, the government has committed some $180 billion in its efforts to rescue AIG, including roughly $80 billion in loans that the insurer is trying to repay through divestitures.
Earlier on Monday, another source said AIG was near a deal to sell its Japanese headquarters for about $1 billion.
A Japanese insurance company is expected to buy the prized building in the Otemachi section of Tokyo, although at least two parties were looking at the property, the source said.
A deal for the building, which overlooks the Imperial Palace, is expected to be announced later this week, the source said. The source did not want to be named because the deal has not been announced yet.
A sale of the Tokyo building would be one of the insurer's largest divestitures since its September rescue.
The largest asset sale was announced last month when it agreed to sell its U.S. auto insurance business to Zurich Financial Services for $1.9 billion.
So far, AIG has reached deals for a dozen businesses, raising more than $4 billion.
AIG Chief Executive Edward Liddy told Reuters in late April that the company was also reviewing second-round bids for an asset management business and an aircraft lessor. Together, sales of those businesses are expected to bring in more than $5 billion.
(Reporting by Paritosh Bansal; editing by Carol Bishopric and Muralikumar Anantharaman)
NEW YORK (Reuters)