American International Group took further action to remove its connection to federal bailout funds afforded it during the 2008 financial crisis. Following its sale of two-thirds of its China-based AIA subsidiary in 2010, the company confirmed that it’s selling another $6 billion AIA Group Ltd. shares to further pay back the U.S. government the funds it acquired under the Troubled Asset Relief Program (TARP).

The insurer is offering approximately 1.7 billion AIA shares at HK$27.15 to HK$27.50 per share to institutional investors who weren’t identified, according to a sales document obtained by Bloomberg. New York-based AIG will hold about 19 percent of AIA after the stock sale, reports Bloomberg.

AIG was rescued in September 2008 after the collapse of the subprime housing market and of Lehman Brothers triggered credit rating downgrades of the insurer. Since its initial acceptance of funds, AIG’s bailout grew to as much as $182.3 billion. AIG has since sold more than $50 billion in assets, but the Treasury still holds about three-quarters of the company’s stock and other AIG-related assets, backed by collateral including the AIA stake.

As reported in Insurance Networking News, in August 2010 China Life Insurance Co., Ltd., China Cinda Asset Management Corp. and Fosun Group withdrew from a joint bid for stakes in AIA ahead of its planned initial public offering.

To date, AIG has steadily divested more than $50 billion in assets to repay the government rescue. Bloomberg reports that AIG most recently sold a $500 million stake in Blackstone Group LP in a block trade, referencing a person familiar with the matter who declined to be identified because he wasn’t permitted to speak about the transaction.

As of May 31, 2011, AIG held 3.96 billion shares, or a 33 percent stake, in AIA, according to an AIA interim report filed last year. AIG since has agreed to hold off selling its remaining shares for another 180 days, according to documents released today.

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