Earthquake-battered 20th Century Industries said it completed its capitalization deal with American International Group Inc. after shareholders "overwhelmingly" approved the transaction in a special vote Thursday.
20th Century, a Woodland Hills insurer, suffered an estimated $900 million in earthquake losses, plunging the formerly profitable company to the brink of insolvency. Under the capitalization plan, New York-based AIG, the nation's largest commercial property and casualty insurer, is investing $216 million of equity capital in 20th Century in return for convertible preferred stock and warrants.
The deal could eventually result in AIG's investing up to $432 million in 20th Century and leaving AIG with more than 40% of the beleaguered company. The two companies also plan a joint venture to expand 20th Century's lucrative auto insurance business outside of California.