AIG should delay meeting, ex-CEO says

Maurice R. “Hank” Greenberg, former chief executive of American International Group Inc., has pressed the New York-based insurer to postpone its annual meeting, which is scheduled for tomorrow. In a May 11 letter filed with the Securities and Exchange Commission, Mr. Greenberg told AIG’s directors that he and other top shareholders were “deeply distressed by [the company’s] excessive loss of value.” Not only is Mr. Greenberg the largest shareholder of AIG, but Hamilton, Bermuda-based Starr International Co., of which he is chairman, is also a major investor in the insurance company. “AIG is in crisis,” he wrote in the letter. “The company’s shareholders need to absorb the significance of the company’s first-quarter losses.” A postponement of the annual meeting would allow investors to think about how the company should proceed, Mr. Greenberg wrote. He also questioned the company’s decision to raise $12.5 billion through the capital markets as opposed to divesting non-core assets or taking capital infusions from sovereign wealth funds or private-equity funds. Reports of the firm’s declining value “have led to a complete loss of credibility with the investment community and even further loss of value for shareholders,” Mr. Greenberg wrote. However, AIG seems close to its target, as it has raised $11.9 billion in a stock sale, $6.5 billion of which came from a common stock offering at $38 a share, while the remainder came from $5.4 billion in equity units that can be converted to stock, according to published reports. In response to Mr. Greenberg’s letter, a spokesman for AIG said that its board has no need to delay the annual shareholders meeting. The spokesman declined to comment further. AIG has hit a rough patch in the last week. Officials at its airplane-leasing unit, International Lease Finance Corp. of Los Angeles, are reportedly concerned about the insurer’s plummeting value and are looking at alternatives, including a spinoff or a sale to another company or a group of investors.