American International Group Inc (AIG) said the Asian unit it is going to list in Hong Kong will probably boost its pretax operating profit to at least US$2 billion for the fiscal year ending Nov. 30.
AIG is planning an initial public offering after a US$35.5 billion agreement to sell AIA Group Ltd to Prudential PLC collapsed in May. Hong Kong-based AIA had a US$1.84 billion pretax operating profit last year, Prudential said in a March filing.
“These kind of numbers make sense given the company has a longer record operating in Asia than companies like the Prudential and has a large market share,” Kenny Tang, executive director at Redford Asset Management Ltd in Hong Kong, said yesterday. “The company is targeting China and the Asia market and I think the response to a share sale here would be good.”
The US insurer is selling non-US life insurance businesses after a US$182.3 billion US bailout in September 2008. AIG disclosed the profit forecast on Saturday after providing it to certain analysts.
“We believe that, in the absence of unforeseen circumstances and, on the bases and assumptions set forth below, our consolidated operating profit for the fiscal year ending Nov. 30 2010 is unlikely to be less than US$2 billion,” the company said in a document released on Saturday.
AIG also said AIA’s annualized new premiums gained 5 percent to US$1.39 billion in the nine months ended Aug. 31, and total weighted premium income rose 11 percent to US$9.33 billion in the same period.
AIA received preliminary approval for an initial public offering from the Hong Kong exchange, paving the way for it to begin gauging investor demand for shares in the company, two people with knowledge of the matter said on Wednesday. AIG may sell more than half its stake in the offering, one of the people said.
On Aug. 6, AIG chief executive officer Robert Benmosche told employees in a memo that the company has begun talking to regulators about “the process and terms of a complete government exit.”
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