Beleaguered insurer American International Group Inc (AIG), has sought relaxations of Federal Reserve rules on its $60-billion disposals programme as part of the deal under which it received funds from it.

In a crisis-hit credit market prospective buyers are finding it difficult to dole out cash. Reports AIG has therefore sought flexible options like installment payments or allowing bidders to pay using a greater portion of shares, thereby making it easier for them to bid for its assets.

The strategy is aimed at attracting more buyers and improving competition for selling its assets, it has already identified.

It will also help AIG counter the perception that it is under pressure to sell its assets at throw away prices to pay back its government loan. This has come about as AIG is facing problems in selling its assets at competitive prices in the market, thus damaging its image.

In the last 10 days it has sold its Hartford Steam Boiler (HSB) unit for $742 million Munich Re, to the world's biggest reinsurer, for about third less than what it paid for it eight years ago, and well below HSB's value estimated between $1 billion and $2 billion (See: Munich Re to buy AIG unit for a bargain price of $742 million) as AIG is forced to sell off units to pay back a US government bailout loan (See : $85-billion bailout for AIG  and Fed pumps another $37.8 billion in AIG).

AIG has received loans amounting to $152 billon - $39.5 billion of a $60 billion bridge loan in lieu of it selling off non-core businesses to repay the government; $28.2 billion of $30 billion from the US Fed to purchase $62.1-billion worth of collateral debt; $20 billion of $22.5 billion from the Fed to purchase residential mortgage-backed securities and last month $40 billion under the Troubled Asset Relief Program.

In exchange AIG has to sell its assets to repay the loans only to those bidders paying at least 90 per cent of the price in cash. This condition was incorporated to make sure that AIG generates liquid cash to repay the principal as well as the interest on the 5 year $60billion government loan, which is part of a $152 billion bailout from the federal government.

However, in the current uncertain global financial conditions where cash may be hard to come by and global stock markets having turned frigid AIG is keen on encouraging prospective buyers.

The company would put forth to the Fed the bids that it receives with more than 10 per cent in shares, AIG's chief executive Edward Liddy was quoted having told Financial Times in an interview.

AIG said in September that it was weighing plans to sell more than 15 of its businesses to repay the $85 billion loan. (See: AIG may sell over 15 businesses to repay $85 billion Fed loan), while holding on to  its US property and casualty businesses and foreign general insurance businesses and keep a majority stake in its foreign life insurance operations, according to Fed data released earlier on Monday.

AIG has already started the process of liquidating its assets. In December, days before its HSB sale to Munich Re it sold its wealth management provider AIG Private Bank to Abu Dhabi-listed investment company Aabar Investments Co for 307 million Swiss francs ($254 million). (See: AIG offloads private banking arm for $254 million)

AIG has to repay the Fed in the next five years but would prefer to repay  as early as possible to free itself from the interest payments and prevent its assets from losing their value.

AIG has so far availed 84 per cent or $127.7 billion of the total loan package.