Restructuring is the process by which a corporation makes significant modifications to its operations and structure to strengthen its financial condition. In AIG’s case, the company is restructuring to meet working capital needs and ultimately enable repayment of loans made by the U.S. government.
AIG’s restructuring plan has four key goals:
• Creation of strong, more independent insurance businesses worthy of investor confidence to stabilize and protect the value of AIG’s important franchise businesses.
• Divestment of assets and implementation of restructuring program to enable repayment of loans made by the U.S. government.
• Comprehensive review of AIG’s cost structure to significantly reduce operating costs.
• Wind-down of AIG’s exposure to certain financial products and derivatives trading activities to reduce excessive risk.
(U.S. GOVERNMENT PROVIDES SUPPORT FOR CONTINUED RESTRUCTURING OF AIG)