HONG KONG (Reuters) - American International Group Inc. (AIG) plans to list its Asian life insurance unit, AIA Group Ltd., on October 29, aiming to raise about $15 billion in Hong Kong, sources familiar with the deal said yesterday.

AIG, which is nearly 80 percent owned by the US government, is disposing of assets to repay taxpayers who committed $182.3 billion to prop up the insurer during the financial crisis.

AIA plans to seek Hong Kong listing committee approval for its Hong Kong IPO on September 21, the source said. If the listing committee approves the offer, AIA is expected to start trading on October 29.

Most analysts expect AIA to clear the Hong Kong stock exchange listing committee hurdle easily. The IPO is expected to be the biggest ever in Hong Kong and also the biggest ever insurance float.

AIG is yet to decide on how much stake it wants to retain in AIA, though bankers said it was clear that AIG wants to sell as much as possible.

In general, Hong Kong stock exchange rules allow companies to sell up to 70 percent stake, though sources said AIG was likely to sell close to 50 percent stake in AIA.

AIA's management is in advance discussions with potential cornerstone investors - who usually have a lock-in period of between six to 12 months - including Singapore state investor Temasek and Middle Eastern funds among others to sell cornerstone stakes, another source said.

Cornerstone investors are likely to be alloted between 15 to 20 percent of the IPO, the source said, compared with the 30 percent stake sold to cornerstone investors in Agricultural Bank of China Ltd.'s record offer.

A decision on AIA cornerstone investors is likely to be made over next two weeks.

At the top end, AIA's IPO could be valued at about $30.4 billion, which was the last offer which AIG received from British insurer Prudential plc., sources added.

AIA plans to kick off pre-marketing of the IPO on September 27, and start the roadshow on October 6, with pricing slated for October 21, two sources close to the deal said.

The sources were not authorised to talk about the schedule publicly. AIA was not available for comment.

Citigroup Inc., Deutsche Bank AG, Goldman Sachs group Inc. and Morgan Stanley are joint global coordinators for the IPO.