AMERICAN INTERNATIONAL Group (AIG), the insurer that received a bailout after the collapse of Lehman Brothers, is selling $6 billion of AIA Group shares to help pay back the US government.
The insurer is offering about 1.7 billion AIA shares at 27.15 to 27.50 Hong Kong dollars a share to institutional investors that weren’t identified, according to a sales document obtained by Bloomberg.
AIG was rescued in September 2008 after the collapse of the subprime housing market and Lehman triggered credit rating downgrades of the insurer.
The bailout swelled to as much as $182.3 billion, much of which the AIG has repaid through asset sales. The Treasury still holds about three-quarters of the company’s stock and other AIG-related assets, backed by collateral, including the AIA stake.
“AIG needs the money to repay the government,” said Andrew Sullivan, principal sales trader at Piper Jaffray Asia Securities Ltd. in Hong Kong. “For holders of the Hong Kong-listed company, it starts to remove a known overhang so it’s a long-term positive, but short term it hurts.” – (Bloomberg)
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