AIG Eyes Hong Kong IPO for AIA

"AIG Eyes Hong Kong IPO for AIA | AboutHK.Com - more information about HK"

American International Group Inc., the steps on the way to a 2010 IPO of Asian life-insurance arm, according to people with the situation. Bankers expect AIG invite investment banks to submit proposals as early as next week to sign a list of AIG's American International Assurance Co., these people said. The move could have more than 5 billion USD, depending on the structure of the transaction, they said. Separately, AIG is steps to sell bidders or the public its operating life in Taiwan, according to people with the situation. AIG engaged Morgan Stanley to sell Nan Shan Life Insurance Co., the No. 2 life insurer by gross premiums after Cathay Life Insurance Co., they said. Nan Shan had a book value of around 87 billion New Taiwan dollars, or around U.S. $ 2.64 billion in late March. The sales are intended to pay back part of a $ 173 billion U.S. government bailout of AIG. An AIG spokeswoman in Hong Kong declined to comment on plans for AIA. "AIG is reviewing various strategic options for Nan Shan at the moment," a Nan Shan spokesperson said. "No particular decision has been made." AIA has a long history and a healthy market position in a number of Asian markets, but it faces the challenge of a good reputation, despite the rescue operation. The transition to a Hong Kong IPO early next year comes after AIG not to find a buyer for the AIA by an auction earlier this year. Bankers stress that the conditions of the AIA IPO market will depend on whether, and far from being achieved. "AIG and the Fed are in listening mode right now," said one banker in Hong Kong. The Federal Reserve Bank of New York, in close cooperation with AIG as part of the U.S. rescue action. Bankers say that they intend to create a structure that the tender for the sale of approximately 20% of the shares to the public. That would at least U.S. $ 5 billion if investors value the entire company around U.S. $ 25 billion. (The large AIG Japan are not part of the AIA.) With another conservative measure, AIA's embedded value was approximately U.S. $ 20 billion by bankers at the closed auction. An IPO of AIA would be a step in the diversification of the Hong Kong stock market away from China-focused offerings. Most of the large supply in recent years, from Chinese state-owned companies and smaller suppliers from the mainland to the private sector. "AIA is coming from a different place in the market," said Tom Deegan, a Hong Kong-based partner with the UK law firm Simmons & Simmons and the head of the China corporate practice. A portion of the sales pitch to potential IPO investors is likely to be strong growth in the Asian life insurance market, driven by a shift in savings from cash and bank deposits to insurance and investment products such as prosperity in the region expanded. McKinsey & Co. estimates that the gross premiums will increase between $ 750 billion and 950 billion dollars by 2012, compared with $ 632 billion in 2007. AIA is one of the five companies with the largest market share in nine of the 12 Asian markets, by 2007, according to McKinsey. AIA has an extensive network of offices and agents, so there are fewer banks to partnerships as competitors such as AXA and Prudential plc of the UK, and the AIA name tops skyscraper in Hong Kong and Singapore. But the name has been violated by the actual nationalization of AIG by the U.S. government. The first rescue of AIG in September shocked policyholders lined outside the AIA offices in many cities to check on their policies or cash out. AIA has consultants at McKinsey, his bank and its brand, say the people with the matter. This includes the transition from AIG marquee and accepting the AIA logo. Comments Please login to post comments or replies.