AIG to Sell Latin American Consumer Finance Units

January 26, 2009

American International Group Inc is selling its consumer finance businesses in Latin America, including a unit in Colombia it bought just last year, as the insurer sheds assets to pay back the U.S. government, according to sources familiar with the matter.

The units being sold include the consumer finance businesses in Mexico, Colombia and Argentina, the sources said.

The initial bids for the AIG Consumer Finance Group Inc. units are expected at the end of this month and have drawn interest from local bidders, one source said.

Executive summaries about the businesses were sent to strategic buyers and financial sponsors late last year, another source said.

AIG declined to comment.

AIG Consumer Finance provides services such as credit cards, auto loans, consumer loans and sales finance in Asia, Europe, and Latin America.

AIG bought Inversora Pichincha, which was the third-largest consumer finance company in Colombia, from Ecuador-based Banco Pichincha CA and other minority shareholders last year.

All three Latin American businesses are relatively small for AIG and not expected to make a big dent in repaying the government, one source said.

AIG, once the world’s biggest insurer by market value, averted bankruptcy in September with an $85 billion federal bailout. The rescue later swelled to about $152 billion.

AIG has said it plans to sell everything except its U.S. property and casualty business, foreign general insurance, and an ownership interest in some foreign life operations.

(Reporting by Paritosh Bansal; additional reporting by Lilla Zuill; editing by Jeffrey Benkoe)

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