<p>The IPO would help AIG repay some of the $180 billion the US government has plowed into what was once the world’s biggest insurer, and allow the profitable Asia life insurance subsidiary, American International Assurance Co Ltd (AIA), to break from its ailing parent. <br /><br />The at least $4 billion initial public offering, based on targets set by AIG executives, would make it the largest Hong Kong IPO since China Citic Bank Corp raised $4.2 billion in April 2007, according to Thomson Reuters data.<br /><br />After AIG failed to sell a large stake in AIA earlier this year, the insurer said it would continue to try and seek a buyer or an IPO. A statement on Monday was the first official sign from AIG that steps toward a listing are underway. AIG said it has asked for requests for proposal (RFPs) to select global coordinators and bookrunners for the IPO, confirming a Reuters report last Thursday. <br /><br />Blackstone Group AIG’s global financial adviser for its restructuring, will manage the IPO, the insurer said. Most major investment banks will pitch their plans to co-manage and underwrite the IPO, which will print huge fees if successful. <br /><br />Hong Kong-based AIA has more than $60 billion of assets under management. Last year, AIA said it recruited more than 52,000 agents, bringing the total to about 250,000 agents. It has about 20,000 employees across 13 Asian markets. <br /><br />Bright prospects<br /><br />AIA is regarded as AIG’s Asia crown jewel, a 90-year-old business providing coverage to about 20 million customers, or close to a third of AIG’s total customer base. Still, analysts say that even with bright prospects, the IPO faces plenty of obstacles. AIG itself said the offering depends on market conditions and regulatory approval. “We need to remember that AIA will be up against the China growth story,” said Patrick Yiu, Associate Director of CASH Asset Management.<br /><br />“Anybody who wants exposure to the insurance sector has the choice of buying China Life Insurance Co Ltd and Ping An. So, unless the terms of the IPO are very attractive, it may not be a huge success.” Speed is also key as delay could put more pressure on AIG and it would be less certain to hit the IPO market on the way up. <br /><br />AIG said it would seek to list AIA on an Asian exchange. CEO Edward Liddy has told Reuters the company is leaning toward a Hong Kong IPO in the first half of 2010. AIA and AIG would have separate boards and management teams. <br /><br />A public listing would coincide with a Hong Kong IPO market that is showing renewed signs of life, with several large offers recently, and more in the pipeline. China Zhongwang Holdings last month raised $1.3 billion in the world’s biggest IPO so far this year. <br /><br />AIG was rescued with taxpayer funds in September after bad bets involving subprime mortgage-related securities left it deeply in the red and on the brink of bankruptcy. The company was forced to sell off assets. Despite moving ahead with an IPO, AIA may still attract a strategic buyer or investor before its listing.<br /><em>Reuters</em></p>
<p>The IPO would help AIG repay some of the $180 billion the US government has plowed into what was once the world’s biggest insurer, and allow the profitable Asia life insurance subsidiary, American International Assurance Co Ltd (AIA), to break from its ailing parent. <br /><br />The at least $4 billion initial public offering, based on targets set by AIG executives, would make it the largest Hong Kong IPO since China Citic Bank Corp raised $4.2 billion in April 2007, according to Thomson Reuters data.<br /><br />After AIG failed to sell a large stake in AIA earlier this year, the insurer said it would continue to try and seek a buyer or an IPO. A statement on Monday was the first official sign from AIG that steps toward a listing are underway. AIG said it has asked for requests for proposal (RFPs) to select global coordinators and bookrunners for the IPO, confirming a Reuters report last Thursday. <br /><br />Blackstone Group AIG’s global financial adviser for its restructuring, will manage the IPO, the insurer said. Most major investment banks will pitch their plans to co-manage and underwrite the IPO, which will print huge fees if successful. <br /><br />Hong Kong-based AIA has more than $60 billion of assets under management. Last year, AIA said it recruited more than 52,000 agents, bringing the total to about 250,000 agents. It has about 20,000 employees across 13 Asian markets. <br /><br />Bright prospects<br /><br />AIA is regarded as AIG’s Asia crown jewel, a 90-year-old business providing coverage to about 20 million customers, or close to a third of AIG’s total customer base. Still, analysts say that even with bright prospects, the IPO faces plenty of obstacles. AIG itself said the offering depends on market conditions and regulatory approval. “We need to remember that AIA will be up against the China growth story,” said Patrick Yiu, Associate Director of CASH Asset Management.<br /><br />“Anybody who wants exposure to the insurance sector has the choice of buying China Life Insurance Co Ltd and Ping An. So, unless the terms of the IPO are very attractive, it may not be a huge success.” Speed is also key as delay could put more pressure on AIG and it would be less certain to hit the IPO market on the way up. <br /><br />AIG said it would seek to list AIA on an Asian exchange. CEO Edward Liddy has told Reuters the company is leaning toward a Hong Kong IPO in the first half of 2010. AIA and AIG would have separate boards and management teams. <br /><br />A public listing would coincide with a Hong Kong IPO market that is showing renewed signs of life, with several large offers recently, and more in the pipeline. China Zhongwang Holdings last month raised $1.3 billion in the world’s biggest IPO so far this year. <br /><br />AIG was rescued with taxpayer funds in September after bad bets involving subprime mortgage-related securities left it deeply in the red and on the brink of bankruptcy. The company was forced to sell off assets. Despite moving ahead with an IPO, AIA may still attract a strategic buyer or investor before its listing.<br /><em>Reuters</em></p>
