US insurer AIG has raised $6bn by selling over one third of its remaining stake in AIA, a Hong Kong- based life insurer, to repay part of the debt it received in a 2008 government bailout.
The sale brings down AIG’s stake in AIA to 18.6% and as per Hong-Kong stock exchange rules it is no longer a controlling shareholder and has been banned from selling the remaining stake in AIA until 4 September 2012.
AIG said that it had received an $182bn bailout during the 2008 global financial crisis.
"AIG expects to use the net proceeds from the placing of AIA ordinary shares to reduce the balance due to the US Department of the Treasury on Treasury’s preferred equity interest in the special purpose vehicle through which AIG holds the AIA ordinary shares," the US group added.
As a result of the deal, two non-executive directors, Jeffrey Hurd and Jay Wintrob, who were nominated by AIG will step down from AIA’s board.
In a 2010 initial public offering, the US insurer sold about two-thirds of AIA to raise money to repay its bailout.
AIG had recently raised $500m by selling a stake in private equity firm Blackstone that it had held since 1998.
The deal was led by Deutsche Bank, Goldman Sachs, Morgan Stanley and Citigroup.