American International Group Inc planned to raise $12.5 billion in capital
American International Group Inc. (AIG), New York-based insurer said that over the past month had raised $20 billion in capital, which is 60 per cent or $8 billion more than projected, in a move to prop up its balance sheet, weakened by severe credit market-related losses. The fund raising had been required to protect against further write-downs, CEO Martin Sullivan said. further he added this will enable them to take advantage of a lot of the attractive emerging markets they’re in, as well as obviously be well-positioned for any continued volatility in the credit markets.
On 8 May, AIG planned to raise $12.5 billion in capital The company made the announcement while reporting a wider-than-expected first-quarter loss of $1.41 a share. Later if said its capital cushion became ”too low for comfort”’ after it wrote down holdings to reflect their reduced market value, contributing to a record $7.81 billion first-quarter loss.
In spite of the loss, to increase the strength of the company’s main insurance businesses, AIG raised its quarterly dividend 10 per cent to 22 cents a share. Sullivan also told investors that the company continued to analyze which investments were a good fit, and would divest ones that were not, citing its past sales of stakes in two Bermuda-based companies it helped found, reinsurer IPC Holdings Ltd and insurer Allied World Assurance Holdings Ltd.
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