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NEW YORK — American International Group Inc. plans to spin off its Asian life insurance unit in an initial public offering to help repay billions of dollars in U.S. government loans.
Shares of American International Assurance Co., known as AIA Group, will be traded on an Asian exchange, though no information was provided about which exchange or the size of the offering. Those details will be based on market conditions and regulatory approval, the company said late Sunday in a statement.
In early March, New York-based AIG said it was considering a possible spinoff or sale of AIA Group.
Last week, Dow Jones Newswires said AIG was planning to raise between $5 billion to $10 billion through a sale of between one-quarter and one-third of AIA Group.
AIA Group has more than 20 million customers and $60 billion in assets.
Shares of parent AIG rose 10 cents, or 5.8 percent, to $1.82 in morning trading Monday.
AIG has been selling assets in recent months to help repay the U.S. government, which helped bail out the struggling insurer in September as the credit crisis mushroomed.
The government provided AIG with an $85 billion loan in September. As market conditions worsened and losses piled up at the insurer, the government revised and expanded its loan package several times. Loans available to AIG total nearly $180 billion after being expanded in March. In return, the government has taken an 80 percent stake in the firm.
On Wednesday, AIG's chief executive, Edward Liddy, told Congress the insurer was making progress toward repaying the loans through asset sales and did not foresee needing more government support.
Also last week AIG announced plans to sell its Japanese headquarters to Nippon Life Insurance Co. for $1.2 billion in cash. The transaction is expected to close in the second quarter.
Last month AIG sold its car insurance unit, 21st Century Insurance, to Zurich Financial Services Group for $1.9 billion. The transaction is the largest divestiture by AIG since September, and one of 11 asset sale agreements it has reached the past few months.
