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AIG selling rest of stake in AIA Group

NEW YORK (AP) -- AIG is selling its remaining stake in Asian life insurer AIA Group Ltd.

The insurance company, whose remaining AIA stake was approximately 14 percent stake, said Monday that it plans to use the net proceeds from the sale for general corporate purposes.

The Wall Street Journal said that AIG may raise as much as $6.5 billion from the stock sale.

Shares of AIG gained 51 cents to $34.45 in premarket trading.

The Journal, based on a term sheet it had access to, reported that AIG began selling 1.65 billion shares of AIA at 29.65 Hong Kong dollars to 30.65 Hong Kong dollars ($3.82-$3.95) a share in a block sale, which will enable it to raise $6.31 billion to $6.53 billion.

The price range is a 3 percent to 6 percent discount to AIA Group's Friday closing price of 31.65 Hong Kong dollars on the Hong Kong Stock Exchange.

AIG declined to comment on the specifics provided in Journal's story.

In September AIG raised about $2 billion selling part of its stake in AIA Group. AIG sold $6 billion in AIA stock in March and after the September stock sale it was restricted from selling any of its remaining shares of AIA until Dec. 10.

American International Group Inc., which is based in New York, nearly collapsed in 2008. It received $182 billion from the U.S. government — the biggest of the Wall Street bailout packages — after suffering massive losses from investments in derivatives.

In 2010, the company spun off AIA in Hong Kong's biggest ever initial public offering to raise $20 billion, which was used to pay bailout debt.

Last week the Treasury Department announced that it sold all of its remaining shares of AIG. The Treasury received $32.50 per share for its 234.2 million remaining shares, which represented a 16 percent ownership stake in AIG. With this sale, the Treasury said that the government has received $22.7 billion more than the $182 billion bailout it provided to support AIG during the height of the financial crisis.

Since the financial meltdown, AIG has undergone a significant restructuring which has cut the size of the company nearly in half aimed at focusing on its core insurance operations.