AIA shares tumble after AIG sale

Shares in AIA Group Ltd. fell 7.88 percent in Hong Kong on Tuesday morning after American International Group (AIG) raised around $6 billion by selling a chunk of the insurance company. The stock fell to $HK26.90 as trading resumed following AIG\'s announcement in New York on Sunday that it intended to sell a slice of its holdings to help pay off the US government after it was bailed out during the global meltdown. The Hang Seng index was down 1.51 percent at 20,944.54 by the break, following a fall on Wall Street amid worries over China\'s slowing growth and what that means for the global economy. AIG said it sold 1.72 billion shares -- about 14 percent of its holding -- at HK$27.15 (US$3.50) each, the bottom of its indicative price range of HK$27.15-HK$27.50. \"AIG will receive gross proceeds of approximately US$6.0 billion,\" it said in a statement. \"AIG will use the net proceeds from the placing of AIA ordinary shares to reduce the balance due to the US Department of the Treasury,\" it added. The pricing came at a seven-percent discount to the Asian insurer\'s previous closing price of HK$29.20 on Friday. AIA\'s initial-public-offering price was HK$19.68 in October, 2010. AIG retains 18.6 percent of AIA stock after the placement.