The Finance Arena – Financial Talks from a Singapore Financial Consultant
AIG, the insurance titan announced yesterday that it will reduce outstanding US loans by US$25 billion by spinning off 2 business units in which the government will be given a preferred stake. AIG will be putting 2 life insurance subsidiaries – American International Assurance (AIA) and American Life Insurance (ALICO), into special purpose vehicles ahead of planned IPOs.
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Michelin, the French tyre maker reported yesterday that it looks set slash 2,800 jobs through early retirement and voluntary redundancies in the next 3 years, igniting concerns from the French government. Michelin further reported it will also shut down 1 of its plants in northern France at Noyelles-les-Seclin but will increase research and development funding at its Clermont-Ferrand plant by more than US$140 million. The downsizing will include 1,093 job cuts from 2010 and a programme to allow 1,800 voluntary redundancies over the next 3 years, the company reported, insisting that none of the planned redundancies would be forced.
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AIG, the ailing insurance giant was reported today that it may list its casualty insurance unit public, and put forward a sale of 20% stake, to raise billions of dollars to return public funds. ‘Because of what has happened to our parent company, we have to go on an independent track. It would be reasonable to conclude that a US listing was probably the most likely outcome,’ Mr Nicholas Walsh, AIU’s vice-chairman told the Nikkei.
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UBS’s long term debt and deposit ratings could be downgraded by Moody’s Investors Service, with the ratings agency warning that the Swiss bank’s financial troubles were not over. ‘The review reflects Moody’s view of the considerable challenges that UBS continues to face in its two largest business lines – Investment Banking and Wealth Management. Given the magnitude of the bank’s challenges and the length of time it may take to fully address them, the bank’s ratings are vulnerable to a downgrade of more than one notch. The bank has also experienced a significant turnover of senior managers over the past two years, which gives us some concerns about the continuity and effectiveness of management,’ stated David Fanger, Moody’s senior vice-president.
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AIG has taken its ex-chief to court, with accusation of him plundering a trust that the ailing insurance titan said was established to pay top performers. AIG argues that Mr Maurice Greenberg, 84, who helmed the company for decades, unlawfully took US$4.3 billion in stock in 2005, the year he was forced out as CEO. Although Mr Greenberg sold the US$4.3 billion block of stock in 2005, way before the price plummeted, he kept much of his personal fortune in AIG shares. When the government stepped in last year, taking a 79.9% stake in the company, Mr Greenberg and other shareholders were essentially wiped out.
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Amazon Inc will pay Toys R Us Inc US$51 million to conclude a long-standing legal dispute between the online retailer and the toy retailer. The lawsuit was over a partnership that accorded Toys R Us exclusive rights to supply some toy products on Amazon’s site. Toys R Us then claimed Amazon violated the partnership by allowing others to sell some toys on Amazon.com, while Amazon refuted that the toy seller failed to keep items in stock. The companies originally teamed up in 2000 after the toy seller’s Web site, Toysrus.com, suffered a brutal 1999 holiday season in which some customers’ toys were not delivered until after Christmas. That partnership was supposed to last through 2010.
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A surprise appearance by Apple CEO Steve Jobs at the company’s annual developer conference could raise its stock later today, but his absence might kick off a severe drop in prices. The Wall Street Journal started speculations of an early return by the weakening Jobs, who had earlier stated that he would be out until the end of June. Blogs and other media pounced on the report that the CEO could appear at Apple’s Worldwide Developer Conference in San Francisco later today.
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A researcher with the country’s top agency was quoted that China’s economy has bottomed out but will require 2 – 3 years to regain its rapid growth. ‘Although the economy has bottomed out, it is touching a flat bottom, instead of a V-shaped bottom. The recovery will be very mild and unstable,’ he added. ‘It will not be stable, quick and sustained.’ Zhang Wenkui of the State Council’s Development Research Centre stated. He further stated that China’s economy would require 2 – 3 years to grow quickly again, and suggested the automobile, housing and computer technology sectors would be the next driving forces.
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American International Group Inc (AIG) has arrived at a deal to sell 2 of its New York buildings, including its downtown Manhattan headquarters to undisclosed buyers and prices. Occupants of the Pine Street office are likely to remain there through the end of 2010, while those at the Wall Street location will remain there through the end of this year.
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General Motors, announced yesterday that hours after filing for bankruptcy protection, has secured a deal to spin off its Hummer brand to a Chinese industrial machinery firm, Sichuan Tengzhong. The Chinese firm ‘will acquire the rights to the premium off-road Hummer brand, along with a senior management and operational team. It will also assume existing dealer agreements relating to Hummer’s dealership network,’ a joint statement reported.
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