RPT-UPDATE 3-AIG launches IPO process for Asia crown jewel
* AIG confirms launching AIA IPO process, seeks Asia listing
* Blackstone to manage process, inviting other bookrunners
* Offering of 20 pct of AIA could raise over $4 billion (Adds details throughout)
HONG KONG, May 18 (Reuters) - AIG is to speed up plans to list its Asian subsidiary through an IPO that could raise more than $4 billion, as the bailed-out U.S. insurer seeks to raise cash to pay back government loans.
The IPO would help AIG repay some of the $180 billion the U.S. government has ploughed 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.
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 (0998.HK) raised $4.2 billion in April 2007, according to Thomson Reuters data.
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. [ID:nN13524571]
Blackstone Group (BX.N), 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.
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.
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 with CASH Asset Management.
"Anybody who wants exposure to the insurance sector has the choice of buying China Life (Insurance Co Ltd (601628.SS)) and Ping An (Insurance (Group) Co of China Ltd (601318.SS)). 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. MEGA IPO Continued...
