AIG raises record $17.8 b in Asian unit's IPO

NEW YORK | HONG KONG: American International Group raised a record HK$138.3 billion ($17.8 billion) from the Hong Kong initial public offering of its main Asian unit, putting the world’s largest insurer on course to repay its 2008 bailout.

AIG sold 7.03 billion shares, or 58%, at HK$19.68 each, the top end of a marketing range, Hong Kong-based AIA said an e-mailed statement. It used an option to expand the sale offered from 5.86 billion, or a 49% stake.

The largest IPO in Hong Kong’s history followed the failed sale of AIA to Prudential for $35.5 billion in June, as shareholders forced the UK insurer to demand a price cut. AIG chief executive officer Robert Benmosche, 66, has said the divestments will put his company “well within striking distance” of repaying the US government for aid received during the global credit crisis.

“AIA attracted a diversified group of investors including Asia-focused funds and local investors,” said Derek Mok, a Hong Kong-based fund manager at Guotai Junan Asset Asia. “The oversubscription is not a big surprise as AIA is a regional insurance player, a rarity in Hong Kong’s IPO market.”