AIG Unit Says No Plan to Sell Kazakh Business

September 30, 2008

The Kazakh unit of AIG said on Tuesday it had no intention of selling its insurance business in the Central Asian state.

On Monday, Kazakhstan’s No.1 insurer Eurasia said it had made a formal offer to buy the Kazakh unit of the U.S. insurance company which was bailed out by the Federal Reserve this month.

On Tuesday, it responded by denying the possibility.

“Yesterday a number of news agencies reported that a takeover offer had been made with regard to AIG Kazakhstan which is part of the American International Group Inc. (AIG) group of companies,” it said in a Russian-language statement.

“We officially announce that AIG Kazakhstan’s business is not for sale. … Our ability to work in the usual mode has not been affected in the light of recent events. … We continue to work in our usual mode.”

Eurasia, owned by the three key shareholders of mining giant ENRC, said in a statement on Monday it had sent the offer to AIG’s London office on Sept. 24.

The Kazakh company did not say how much it was ready to pay for AIG Kazakhstan, but said it could consider further bids for AIG assets.

AIG, once the world’s largest insurer, was forced to seek a government rescue earlier this month after its shares crashed, leading ratings agencies to cut its credit ratings and forcing the company to post billions of dollars in additional collateral on derivatives contracts it insured.

(Writing by Maria Golovnina; editing by Jon Loades-Carter)