American International Group Inc. (AIG) says the AIA Group Ltd. initial public offering (IPO) should raise the equivalent of about $18 billion in gross proceeds.

AIG, New York (NYSE:AIG), has discussed the AIA IPO in an report filed today with the IPO pricing report filed with the U.S. Securities and Exchange Commission.

AIA, Hong Kong, is one of the leading insurers in the Eastern Hemisphere. It has operations in EarthAustralia, Brunei, China, Hong Kong, India, Indonesia, Macau, Malaysia, New Zealand, Singapore, South Korea, Thailand and Vietnam.

AIG is selling a 58% stake in AIA in an effort to pay back part of what it owes the Federal Reserve Bank of New York and the U.S. Treasury Department for aid provided during the recent credit crisis.

The AIA IPO will involve a base offering of a total of about 7 billion ordinary shares, the company says.

The underwriters have an option to buy another billion shares if investors buy all of the first 7 billion shares.

The price of a share will be a $19.68 in Hong Kong dollars, or about $2.53 in U.S. dollars. The conversions here are based on an exchange rate of 1 Hong Kong dollar to 13 cents in U.S. currency.

Earlier this week, AIG had suggested the price could be somewhere between $2.37 to about $2.54 per share.

AIA hopes to see its shares trading on the main board of the Hong Kong Stock Exchange Limited starting Oct. 29, the company says.

Earlier this year, AIG tried and failed to sell AIA to Prudential P.L.C., London (NYSE:PUK), for about $35 billion. Some investors who own stakes in the U.K. Prudential, which has no connection with Prudential Financial Inc., Newark N.J. (NYSE:PRU), argued that Prudential-AIA deal was overpriced.

The pricing of the AIA IPO would give AIA as a whole a market value of about $31 billion.

- Allison Bell