AIA kicks off Hong Kong IPO

Troubled US insurer - American International Group Inc.'s pan-Asian life insurance unit AIA Group Ltd. Monday Kicked off its closely watched Hong Kong initial public offering, worth up to US$15 billion (S$19.9 billion), in what could be the world's second-biggest stock offering this year.

AIA, which AIG is listing to help repay U.S. taxpayers following a massive government bailout two years ago, won't be selling new shares in its planned Hong Kong IPO, according to a term sheet seen by Dow Jones Newswires on Monday.

AIA is scheduled to list in Hong Kong on Oct. 29, with the investor presentation to start Oct. 5 and pricing to be set Oct. 21, according to an earlier term sheet. AIG's shares in AIA are subject to a six-month lockup period following the unit's listing, the term sheet Monday said.

AIG expects AIA to have an operating profit of at least $2 billion in the fiscal year ending Nov. 30, according to an unaudited accounting statement released by AIG on Saturday. AIA had an 11% increase in premium income in the first nine months of the year to $9.3 billion, AIG said.

The increase was driven by growth in Thailand and Korea. AIA's IPO, after the collapse in June of Prudential's US$35.5-billion takeover bid, follows Asia-focused unit of AIG, and also comes as Hong Kong's benchmark index chalks up an almost 9% gain in the past three months.