Shanghai Set to Host American International Assurance (AIA) IPO

China Life Insurance Company Limited is likely to be chosen as a cornerstone investor in the listing of American International Assurance (AIA), according to market watchers. AIA's parent company, American International Group (AIG), has promised to repay its debts to the US government by June 2010, making it possible for AIA to go public in the first half of 2010, with a fundraising target of at least USD 5 billion. The company is considering listing on either the Hong Kong or Singapore stock exchange, with Hong Kong being the more likely choice due to its close ties with AIA's major assets and businesses.

Key Takeaways:

China Life Insurance Company Limited is likely to be chosen as a cornerstone investor in AIA's listing, given its status as the largest life insurer and institutional investor in mainland China.
AIA's parent company, AIG, has committed to repaying its debts to the US government by June 2010, paving the way for AIA's IPO in the first half of 2010.
The fundraising target for AIA's IPO is expected to be at least USD 5 billion.
AIA is considering listing on either the Hong Kong or Singapore stock exchange, with Hong Kong being the more likely choice due to its proximity to AIA's major assets and businesses.
AIA's restructuring in February resulted in assets worth USD 60 billion, with a possible injection of its Philippine branch into AIA in the future.
Chen Rongsheng, former president of AIA China, resigned in June, and was replaced by Cai Qiang, who took over as president of AIA China.
Chen Rongsheng's leadership saw improvements in insurance sales, talent recruitment, and corporate image, but AIA China still lags behind in integrating domestic branches, hindering its development into a legal-person company.

Statistics:

The assets of China Life Insurance Company Limited are over CNY 1 trillion.
The Hong Kong dollar-denominated shares of China Life closed up 2.33% at HKD 35.15 per share on Monday.
The total assets of AIA reached USD 60 billion after its restructuring in February.
The expected fundraising target for AIA's IPO is at least USD 5 billion.
AIG has committed to repaying its debts to the US government by June 2010.
AIA is considering listing on either the Hong Kong or Singapore stock exchange, with Hong Kong being the more likely choice due to its proximity to AIA's major assets and businesses.

Sources:

SinoCast Daily Business Beat (August 4, 2009)
Comtex SmarTrend Alert (July 31, 2009)