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HONG KONG — The Asian insurance unit of American International Group Inc. said Friday it will raise about $18 billion from its Hong Kong listing — helping AIG to repay a massive U.S. government bailout.
AIA Group Ltd. said in a statement that shares in the initial public offering will be sold at HK$19.68 each — the top end of an earlier announced range that started at HK$18.38.
It will also increase the size of the offering by 20 percent to 7.03 billion shares, raising the estimated proceeds to $17.8 billion. The company gave an estimate of $14.1 billion last week based on the shares being sold at the midpoint of the indicative range.
Underwriters could further expand the offering by 15 percent, the company said.
AIG received $182 billion from the U.S. government after suffering massive losses from investments in complex derivatives — the biggest of the Wall Street bailout packages — and is now trying to repay the loans amid widespread anger among the American public.
The proceeds from the Hong Kong IPO will be used to help repay an initial $20 billion AIG received from the Federal Reserve Bank of New York. The IPO came after AIG failed to sell AIA to fellow insurer Prudential PLC in a deal worth $35.5 billion.
AIG is also repaying other sums it owes the U.S. government by letting the U.S. Treasury exchange its majority stake in the company for common stock and selling those shares over time.
Among the key institutional investors buying into the AIA listing are the Kuwait Investment Authority, the Malaysian government employee pension fund, Malaysia's Hong Leong Financial Group and Hong Kong tycoons Cheng Yu-tung and Peter Woo.
AIA shares will start trading in Hong Kong on Oct. 29.
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