AIG plans to offload half its stake in Asian unit AIA Group
27 Oct 2011
American International Group, once the world's largest insurer, plans to sell half its stake in AIA Group Ltd, the Asian life insurer it took public last year, The Wall Street Journal reported, citing people familiar with the matter.
AIG can unload roughly $6 billion worth of AIA shares in a secondary offering in Hong Kong after a one-year lock-in expires this week.
Analysts say an offering isn't likely to take place immediately, given recent market volatility, and the timing will depend on market conditions and the price of AIA's publicly traded shares, the people told the news agency.
New York City-based AIG, which is 77-per cent owned by the US government, had raised $17.8 billion in its IPO in Hong Kong's largest ever in terms of funds raised in October last year.
Following the IPO, AIG was left with a 33-per cent stake in AIA Group Ltd.
AIG is now planning to sell half of its take at more than the IPO price of HG$19.68 ($2.53).
AIA Group operates in 15 Asian markets with 309,000 agents, 24,500 employees and more than 23 million in- force policies. The unit had about $1.78 billion in operating profit in 2009, down from $1.87 billion in 2008.
The potential share sale would help AIG repay to the US government the outstanding $37 billion remaining bailout from the original $180 billion it received during the global financial crisis in 2008.
