Hit hard by the global financial crisis, the troubled American insurer intends to raise capital to repay bail-out funds
American International Group has entered into an agreement to sell 100% of its shares of AIG Finance (Hong Kong) to China Construction Bank Asia (CCB) for $70 million in cash, plus the repayment of intra-group indebtedness and deposits of approximately $557 million.
In a statement, Charles Ma, CEO of CCB, said: The acquisition is a significant strategic move for CCB (Asia) as we expand our consumer finance business in the Hong Kong market. We strongly believe that the acquisition will benefit us in the growth and diversification of our consumer loan portfolio, and will serve as an excellent platform for growing our credit card business.
Deutsche Bank acted as financial advisor to AIG on this transaction. The transaction is subject to the satisfaction of certain conditions, including approvals by appropriate regulatory authorities.
AIG Finance issues credit cards in Hong Kong and operates as a restricted license bank that offers financial products and services. As of June 30, 2009, AIG Finance had more than 500,000 customers, total net loan receivables of HK$4.8 billion and a retail deposits balance of HK$1 billion.