Copyright: A.M. Best Company, Inc.
Source: BestWire Services
Wordcount: 419
An Omaha, Neb.-based energy company will reacquire a 50% stake in its natural gas marketing affiliate from an American International Group Inc. subsidiary that looms large in the global insurer’s ongoing financial crisis.
Tenaska Inc. announced that it will repurchase a stake that AIG Financial Products Corp. acquired in April 2007. The move will help unwind the AIG subsidiary, and is part of an overall AIG strategy to offload noncore assets and repay debt on $150 billion federal bailout plan.
Both sides anticipate the deal closing by Jan. 2, 2009, pending regulatory approvals. Tenaska once again would own 100% of Tenaska Marketing Ventures, the affiliate formed in 1991. Terms of the agreement were not disclosed.
Paula Reynolds, AIG vice chairman and chief restructuring officer, said AIG (NYSE: AIG) benefited from the investment but it no longer fit within its sharpened focus on core insurance products.
Tenaska touted the AIG subsidiary’s backing when the partnership first transpired. According to Tenaska’s annual report for 2007, TMV was able to add a $1 billion backstop credit facility to an existing five-year, $1 billion line of revolving credit as a result of the affiliation. Transactional pretax net income rose 34% in 2007, compared with the previous year, according to the company.
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