American International Group (AIG) has sold a large portion of its share in China's PICC Property and Casualty Co. Ltd. (PICC P&C) in one of the biggest block deals in Asia, in a bid to raise HK$9.68 billion ($1.25 billion), IFR reported on Sunday, May 1.
A Reuters report cited IFR as saying that more than 740 million shares were sold by AIG, at HK$13.08 per share, close to the bottom end of a marketing range, which were bought mostly by institutional investors.
The report said that AIG has been selling its shares in PICC P&C since last year, which enabled it to raise about $2.6 billion. AIG has invested in the company even before it made its initial public offering (IPO) in 2003.
In Europe and the U.S., several financial institutions have been trying to lessen their exposure to Chinese banks and insurers. In recent months, Citigroup and Deutsche Bank have both sold their meager shares in Chinese banks.
The shares sold by AIG were offered at a price range of HK$13.06 to HK$13.35 each, more than 8 percent lower than PICC's closing price on Friday.
Thomson Reuters data showed that AIG will have some 110 million shares left in PICC, with a 60-day lock-up on the shares.
Since last year, AIG has been trimming its exposure to PICC P&C, as it raised $1.3 billion in two separate sales.
The company acquired a stake in PICC P&C as founding investor in 2003.
AIG started in 1919, after Cornelius Vander Starr set up a general insurance business in Shanghai. When crisis hit the global financial industry in 2010, AIG sold its life insurance business, AIA Group Ltd., through an IPO worth $20.1 billion and repaid the bail-out of the U.S. government.
However, in 2013, it bought about $500 million shares in People Insurance Group of China Co. Ltd. through an IPO.
Before the recent sale of its shares, with Goldman Sachs and Morgan Stanley as coordinators for the deal, the company was the biggest shareholder of PICC P&C, with 851 million shares.