AIG Takeover of Chiyoda Delayed As Administrators Consider Rival Bids

February 5, 2001

Japanese newspaper reports that AIG was in the final stages of taking over failed insurer Chiyoda Mutual Life appear to have been a bit premature, as administrators for the company announced that they would hold talks with two other interested, but as yet unidentified, potential candidates.

The latest estimates put Chiyoda’s negative net worth at over 700 billion yen ($6.1 billion), and although AIG has said it would not seek public funds to help in the insurer’s rehabilitation, it has indicated that payments to policyholders would have to be substantially reduced.

Administrators told Reuters News Agency that they still hoped to complete a deal by the end of February, but that there was “no factual basis in the report that we have decided to choose AIG as the sponsor.” Chiyoda is still planning to reopen for business in April.

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