HONG KONG — American International Group raised a record $17.8 billion in the Hong Kong initial public offering of its main Asian unit, putting the bailed-out insurer on course to repay its U.S. assistance.
AIG sold 7.03 billion shares in AIA Group, or a 58 percent stake, at $2.54 each, the New York-based insurer said Friday in a filing. That makes it the largest Hong Kong public offering, exceeding the $16 billion raised by Industrial & Commercial Bank of China in 2006, according to data compiled by Bloomberg. AIA shares may begin trading on the Hong Kong Stock Exchange Oct. 29, AIG said.
Chief executive Robert Benmosche has said the divestment of AIA and another non-U.S. division will put AIG “well within striking distance” of repaying a Federal Reserve credit line included in the company’s $182.3 billion U.S. bailout.
AIG turned to the public offering following the June collapse of a $35.5 billion deal to sell AIA to Prudential PLC after the London-based firm’s investors balked at the price.
“The IPO is the biggest money in the door for AIG and the U.S., without question,” said Clark Troy, senior analyst at Aite Group in Chapel Hill, N.C. “Success on this sale is the biggest step towards a government exit.”
AIA expects operating profit of at least $2 billion for this year and operates in 15 Asian markets with 309,000 agents 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.
