HONG KONG (Reuters) – American International Group Inc (AIG.N) will sell only existing shares in its Asian life insurance unit, AIA Group Ltd, in the unit's upcoming initial public offering, a term sheet showed on Monday.
AIG was subject to a lock-up period of six months after listing and in the subsequence six months it was required to hold at least 30 percent of AIA, it said.
AIG, nearly 80 percent owned by the U.S. government, is disposing of assets to repay taxpayers who committed $182.3 billion to prop up the insurer during the financial crisis.
AIA will not sell new shares within six months of listing and cornerstone investors are also subject to a six-month lock-up period.
AIA planned to kick off its marketing roadshow on Monday, with trading scheduled to start on October 29, sources previously told Reuters.
Citigroup Inc (C.N), Deutsche Bank AG (DBKGn.DE), Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N) are joint global coordinators for the IPO.
(Reporting by Kennix Chim; Editing by Chris Lewis)
TOKYO (AFP) – Japan's trade surplus fell 37.5 percent in August from a year earlier as the resource-poor country imported more crude oil and liquid natural gas, the government said Monday.
The surplus was 103.2 billion yen (1.22 billion dollars) in August, shrinking for the first time in 15 months on year-earlier levels, according to the finance ministry.
The figure was significantly lower than market expectation.
NEW YORK (Reuters) – American International Group Inc and the U.S. government are moving closer to a deal on how the Treasury Department would exit its investment in the bailed-out insurer, sources familiar with the situation said on Sunday.
The situation, however, is still fluid and there are many moving parts, one of the sources said.
The plans may be unveiled as early as this week, but the exact timing of an announcement depends on the pace of negotiations, Bloomberg reported.
A possible conversion of the Treasury's $49 billion preferred stake in AIG into common stock is one of the options being discussed, Reuters previously reported.
Such a conversion, which could start as soon as the first half of next year, would possibly raise the government's stake in AIG to above 90 percent from nearly 80 percent. The Treasury would sell its common stake to investors over time.
"Our objective remains the same at AIG, which is to repay taxpayers and position AIG over time as a strong, independent company worthy of investor confidence," AIG said. The sources are anonymous because talks are not public.
The exit plan being discussed would chart the eventual disengagement of the government from AIG, which was propped up by a $182.3 billion taxpayer-funded aid package during the financial crisis.
The bailout saw funds from the Federal Reserve Bank of New York and the Treasury, and was structured so that the Fed must be paid back first, which AIG still has to do. But the talks show that the insurer is making progress in its restructuring.
AIG owes the Fed about $21 billion under a credit facility. The Fed also owns $25 billion worth of preferred interest in two of AIG's foreign life insurance units that must be monetized.
The company expects a big part of that money to come in by the end of the year as it closes on the sale of American Life Insurance Co to MetLife Inc for $15.5 billion and lists American International Assurance (AIA) in Hong Kong. AIA is planning an estimated $15 billion IPO next month in Hong Kong.
(Reporting by Paritosh Bansal in New York, editing by Martin Golan)