AIG sells $6bn AIA stake to pay down debt AIG is selling more than one-third of its remaining stake in AIA to raise about $6bn that it will use to pay down more of the debt it owes to the US Treasury, according to people close to the deal. Trading in shares of Hong Kong-listed AIA was suspended on Monday as the pan-Asia life assurer's former parent began the private placement of roughly 1.7bn shares at a near 6 per cent discount to Friday's close of HK$29.20. The sale, which amounts to a stake in AIA of about 13 per cent, will see AIG left with roughly 20 per cent with the US group facing a lock-up of 180 days on those shares. "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 said in a statement. AIA, which had been one of the oldest parts of AIG, the world's largest insurer before the crisis, was listed in Hong Kong in October 2010 in one of the largest single asset sales made by AIG. The listing, which followed the collapse of an attempt to sell the entire Asian insurance group to Prudential of the UK, raised $17.8bn and valued the group at just less than $30bn. At Friday's close, AIA was worth more than $45bn. AIA said AIG expects the pricing of the placing to occur no later than Tuesday, and that it expects "trading in the company's shares will resume no later than 7 March 2012." "The company is not a party to the potential placement of shares," AIA said. The shares will be sold globally with US and Asian investors expected to be most active. AIG has been selling assets as it pays down obligations to the US government, which bailed out the insurer in 2008 to the tune of $180bn. The group added a $1bn mark-to-market adjustment in AIA's value in its fourth-quarter results last month, which represented more than half its net operating income. Robert Benmosche, AIG's chief executive, told analysts in February that AIG could sell AIA shares to raise cash to buy back AIG shares from the US Treasury, which still owns 77 per cent of the group. To raise capital, AIG has been shedding non-core businesses, such as its asset management unit, and is accelerating sales of some of its investments. The taxes on those sales will be covered by some $50bn in credits AIG accumulated following its steep losses after the financial crisis. Last week, AIG sold a stake in private equity firm Blackstone that it had held since 1998, raising $500m. Additional reporting by Telis Demos in New York