By KELVIN CHAN, Associated Press
HONG KONG (AP) — American International Group Inc. is selling part of its stake in AIA Group Ltd. to raise $6 billion as it continues to repay the $182 billion government bailout that prevented the company's collapse during the 2008 financial crisis.
New York-based AIG plans to sell a "significant proportion" of its 33 percent stake in AIA, the Hong Kong listed company said Monday.
AIG confirmed late Monday that it is selling 1.72 billion AIA shares at 27.15 Hong Kong dollars ($3.50) each. That would raise about HK$46.7 billion ($6 billion).
The shares are being sold to institutional investors and the proceeds will be used to pay off money owed to the U.S. Treasury, AIG said. The sale is due to close Thursday.
The insurance giant teetered near collapse in 2008. It received $182 billion from the U.S. government — the biggest of the Wall Street bailout packages — after suffering massive losses from investments in derivatives.
Most of the rescue money went to pay the firm's obligations to big banks.
AIG has been steadily paying back its debt and according to a government watchdog, owed U.S. taxpayers $50 billion as of Dec. 31. The government still owns about 76 percent of AIG.
In 2010, AIG spun off AIA in Hong Kong's biggest ever initial public offering to raise $20 billion — money that was used to pay bailout debt.
Shares of AIA are suspended from trading in Hong Kong pending the share sale.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.