AIG Plans Debt Sale Within 12 Months on Path to Independence, Miller Says

American International Group Inc. plans its first debt offering since the insurer’s bailout two years ago as the firm moves toward independence from the U.S. government, Chairman Steve Miller said today.

AIG is “nearing the conclusion” of talks with regulators about its strategy to repay taxpayers and the insurer’s board is scheduled to meet today to vote on the plan, Miller said today at a Dow Jones private equity conference.

“We think that with the clarity of what we hope to get done, we’ll be able to re-access the public markets in six months to a year,” Miller said in an interview after a panel discussion, his first public comments since being named chairman of New York-based AIG in July.

Miller became AIG’s sixth chairman since 2005 when predecessor Harvey Golub stepped down after clashing with Chief Executive Officer Robert Benmosche. Miller, 68, has overseen the bankruptcy of auto-parts supplier Delphi Corp. and helped Chrysler Corp. return to profitability. He wrote a 2008 autobiography called “The Turnaround Kid: What I Learned Rescuing America’s Most Troubled Companies.”

Miller said during his presentation that AIG’s restructuring plan offers a “strong possibility of significant profit for taxpayers” and would leave AIG “one of the world’s largest insurance companies”

The insurer may reach a deal as soon as today to sell two Japanese life insurance units to Prudential Financial Inc. for about $4.8 billion in cash, said people with knowledge of the matter. An agreement would cap two years of talks for the units, Star Life Insurance Co. and AIG Edison Life Insurance Co., between Newark, New Jersey-based Prudential and AIG.

Asset Sales

AIG is also divesting its two biggest non-U.S. life insurance divisions, AIA Group Ltd. and American Life Insurance Co., to pay down its Federal Reserve credit line. MetLife Inc. said this month that its purchase of Alico, for about $15.5 billion, is “on track” to be completed on Nov. 1. AIG may hold an initial public offering for AIA in October.

MetLife shares obtained in the sale “are an important asset” that “will be part of the architecture” of AIG’s deal to repay the U.S., Miller said in the interview.

To contact the reporters on this story: Hugh Son in New York at hson1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net.

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