NEW YORK (Bloomberg) — Maurice (Hank) Greenberg, the former chief executive officer of American International Group Inc., will probably sit out auctions to break apart the insurer he built over four decades, an outcome he calls a "tragedy".

AIG should immediately stop accepting bids for units including an overseas life insurer, plane-leasing unit and an asset manager, Greenberg, 83, said yesterday in an interview. The New York-based firm, once the world's largest insurer, is selling most of its operations to repay a $60 billion US loan.

"It would be a tragedy if they sold some of the key parts of the company at prices that are less than what the real value is," Greenberg said. "You can't possibly pay the taxpayer back by liquidating the company, or a major part of it."

Greenberg's decision may remove a potential bidder as AIG chief executive Edward Liddy, appointed in September, sells units to repay "every penny" of the firm's debt to the government. Greenberg, whose stake in AIG shares he owns or controls plunged by about $15 billion last year, had said in a September regulatory filing that he'd consider acquiring subsidiaries.

Liddy shouldn't be selling businesses while the contraction in credit markets hobbles buyers' ability to raise cash for acquisitions, Greenberg said, adding that he won't be involved in AIG being "decimated".

"How do you pick the most devastating time in memory to say, 'We're going to sell all these assets now?" Greenberg said. "What do you expect to get for them?"

AIG is "focused on the concerns expressed by all of our shareholders", said Christina Pretto, a company spokeswoman. "The interests of US taxpayers, as well as other AIG stakeholders, are reflected in our commitment to repay the government loan despite challenging economic conditions."

AIG has struck deals to raise about $2.2 billion so far by selling businesses including equipment insurer Hartford Steam Boiler. That company sold last month for about $742 million, about a third less than AIG paid for the unit in 2000.

The buyer, Munich Re, will assume $76 million of the unit's debt, and AIG has received more than $700 million in dividends and other payments from the company since the acquisition, AIG has said.

The company nearly collapsed last year when it had to make payments tied to credit-default swaps sold to banks. Liddy was appointed by the US to run AIG after it needed an $85 billion federal loan to stave off bankruptcy. He is AIG's third CEO since Greenberg left in 2005. The insurer's rescue package has since expanded to about $150 billion and included more time and a lower interest rate on the loan.

Greenberg said he was an "optimist" about chances that a new US administration will restructure the bailout again.

"I have to believe those responsible in government are looking at the prices that have been realised so far versus what the real values are," he said.

Liddy is paying executives and employees at least $619 million in retention awards to keep them in place while he sells businesses, a move that Greenberg said wouldn't prevent top workers from leaving.

"When you put a sign out that the company is going to be liquidated, you don't think the good people will leave?" he said.

Greenberg controlled the largest stake of AIG shares before the government takeover through personal holdings and investment firms CV Starr & Co and Starr International Co. The stock plunged 97 percent last year.

Greenberg was forced to retire in March 2005 amid state and federal probes into accounting and sales practices. He denies any wrongdoing in the case, which is still pending. Then-New York Attorney General Eliot Spitzer dropped portions of the lawsuit in 2006 that included four other allegations tied to the investigation.