AIG Raises $500M Through Sale of Shares in China P/C Giant

March 30, 2015 by Fox Hu

American International Group Inc. said it sold part of its holding in PICC Property & Casualty Co., China’s biggest non-life insurer, for about $500 million.

AIG, the largest commercial insurer in the U.S., sold about 256 million shares of PICC at HK$15.15, according to a statement issued Monday. That’s about a 4 percent discount to PICC’s closing price of HK$15.80 in Hong Kong.

Foreign investors have been selling holdings in Chinese insurers as their shares surged on rising investment returns. Singapore’s state investment company, Temasek Holdings Pte, cut its stake in Ping An Insurance Group Co. in December.

AIG, which has shrunk by half since its U.S. bailout in 2008 through asset sales, is seeking to generate funds to buy back more than $1 billion of its bonds and continue repurchasing stock. AIGsaid it retains about 1.2 billion PICC shares, or about an 8.2 percent stake.

Last month, AIG Chief Executive Officer Peter Hancock said the insurer wouldn’t be rushed into selling international holdings such as its stake in plane-lessor AerCap Holdings NV. AIG raised a total of about $35 billion when it finished exiting Hong Kong-based AIA Group Ltd. in 2012.

PICC shares have surged 55 percent in the past year, outpacing the 12 percent gain in the benchmark Hang Seng Index. AIG held about 1.47 billion shares of PICC before the sale, or 32 percent of the company, according to data compiled by Bloomberg.

Goldman Sachs Group Inc. is among banks arranging the sale, the terms show.
–With assistance from Doni Bloomfield and Sonali Basak in New York.