AMR says considering sale of investment unit

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Aug 20, 2002
AMR says considering sale of investment unit
Tuesday October 29, 1:04 pm ET
FORT WORTH, Texas, Oct 29 (Reuters) - The parent company of American Airlines, AMR Corp. (NYSE:AMR - News), on Tuesday said it was considering selling off its affiliated investment company, as the carrier tries to shore up its shaky bottom line.

AMR, which lost close to $1 billion in the third quarter of this year, enlisted brokerage Salomon Smith Barney to perform a valuation analysis on AMR Investment Services, spokesman Al Becker said.
This is a first step toward a possible sale of the unit, Becker said.
Industry sources said the unit could fetch about $140 million to $190 million if it were sold.
If the company decides to spin off the unit, AMR would likely move ahead quickly with the sale, Becker said.
Becker said AMR Investment Services has been a successful business but it is not a core component of the operations of the world''s largest carrier.
The possible sale is just one of many steps undertaken by the company to revitalize its finances, which were devastated by the effects of the Sept. 11 attacks on air travel.
AMR Investment Services is a wholly owned company that manages about $27 billion in assets. It was formed in 1987 with about $4 billion in assets from employees'' retirement funds and AMR cash holdings. About half of its assets now come from outside AMR.
AMR has lost more than $2.5 billion, excluding special items, since the attacks last year as the airline industry remains mired in a historic slump driven by decreased demand for air travel.
Chief Financial Officer Jeff Campbell has said AMR has developed substantive plans for $2 billion in cuts of a $3 billion savings goal.
AMR shares were off 6.1 percent, or 30 cents, at $4.60 in Tuesday midday trading on the New York Stock Exchange.
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