By Prudence Ho
HONG KONG (MarketWatch) -- American International Group Inc. /zigman2/quotes/203700638/composite AIG -2.33% is raising about US$6 billion selling 1.7 billion shares in insurance company AIA Group Ltd. , according to a term sheet seen by Dow Jones Newswires, as the U.S.-based company plans to further reduce its debt to the U.S. government.
AIG, which currently holds 32.89% of AIA Group, is selling AIA Group shares at HK$27.15 to HK$27.50 each, representing a 5.8% to 7.0% discount to its closing price Friday of HK$29.20.
There is a lock up of six months on AIG's remaining AIA Group shares.
Shares of AIA Group were suspended from trading Monday pending an announcement about major shareholder AIG's potential share placement, the insurance company said.