NEW YORK CITY (dpa-AFX) - U.S. Insurance giant American International Group, Inc. (AIG) announced Monday that it will invest HK$718.1 million or $92.5 million in a rights offering by China's PICC Property and Casualty Co. Ltd. or PICC P&C, which is a subsidiary of Chinese stat-owned People's Insurance Co. (Group) of China Ltd. or PICC Group.
AIG noted that its holdings in PICC P&C will remain at 9.9 percent immediately prior to and after the rights offering.
PICC P&C intends to raise a total of about $944 million through its rights offering in Hong Kong and China to boost its capital base by offering 1.1 new shares for every 10 existing shares held. However, the offering is priced at a hefty discount of 47 percent at HK$5.38 per share.
AIG already owned about 9.9 percent of PICC P&G, a subsidiary of the PICC Group with publicly listed shares in Hong Kong. PICC P&G listed in Hong Kong in 2003.
AIG had in November 2012 forged a joint-venture insurance agency with PICC Group and PICC Life Insurance Co. Ltd. or PICC Life, to sell life insurance and other insurance products in China. The joint venture is focusing on China and engage in reinsurance and other related business cooperation.
As part of the joint-venture deal, AIG has also agreed to invest about $500 million in H shares of PICC Group in its then upcoming in December 2012.
AIG closed Monday's regular trading session at $44.99, down $0.34 or 0.75% on a volume of 11.03 million shares.
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