Banks have taken over control of two Dubai properties belonging to the real estate arm of bailed-out insurer American International Group Inc (AIG.N) after it refused to pay more to cover lenders' risk, a source familiar with the proceedings said on Thursday.
The properties have been for sale since at least early 2009, part of AIG's program to dispose of assets to pay back its government rescue, but the company has been unable to find a buyer.
"They breached a valuation covenant. Banks were willing to talk, taking over the asset is always the last resort," the source said, speaking on condition of anonymity. "Banks lost their patience."
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