American International Group Inc has put its rail-car subsidiary on the auction block in a bid to shed non-core assets to repay the bailout and regain independence from government ownership, says a media report.
"AIG has put its rail-car subsidiary on the auction block, another small step by the giant insurer as it seeks to shed non-core assets to repay its bailout and regain independence from government ownership," The Wall Street Journal reported.
The assets have a book value, or net asset value, of roughly $660 million but it is unclear what price AIG is seeking, it added.
AIG Rail Services Inc, a Chicago business that is part of AIG's financial-services division, was set up around five years ago and provides rail-car leases and equipment financing to shipping companies, railroads and others.
AIG Rail's assets, which include more than 10,000 rail cars and leases on them, were recently put up for sale, the report said citing people familiar with the matter.
The report quoted GATX Corp president and chief executive Brian Kenney saying that his company has expressed interest in the AIG assets and has tried to get information on them.
The government-controlled insurer is selling most of its non-core assets to raise cash to repay its taxpayer-funded bailout and restructure into a smaller company focused mainly on global property-and-casualty insurance and US life insurance and retirement services. AIG has completed more than $50 billion in asset sales -- including foreign life-insurance units, an asset- management business and office towers.
It also hopes to sell about $60 billion of its common stock to private investors in the next two years to repay the remainder of its bailout.