HONG KONG (Bloomberg) — American International Group Inc. raised a record HK$138.3 billion ($17.8 billion) in the Hong Kong initial public offering of its main Asian unit, putting the bailed-out insurer on course to repay its US assistance.

AIG sold 7.03 billion shares in AIA Group Ltd., or a 58 percent stake, at HK$19.68 each, the New York-based insurer said on Friday in a filing.

That makes it the largest Hong Kong public offering, exceeding the $16 billion raised by Industrial & Commercial Bank of China Ltd. in 2006, according to data compiled by Bloomberg. The AIA shares may begin trading on the Hong Kong Stock Exchange on October 29, AIG said.

Chief executive officer Robert Benmosche, 66, has said the divestment of AIA and another non-US division will put AIG "well within striking distance" of repaying a Federal Reserve credit line included in the company's $182.3 billion US bailout. AIG turned to the public offering following the June collapse of a $35.5 billion deal to sell AIA to Prudential Plc after the London-based firm's investors balked at the price. "The IPO is the biggest money in the door for AIG and the US, without question," said Clark Troy, senior analyst at Aite Group in Chapel Hill, North Carolina. "Success on this sale is the biggest step towards a government exit."

AIG's share price has advanced about 41 percent this year as Benmosche announced deals including a $15.5 billion sale of AIG's other main non-US life insurance division, American Life Insurance Co., to MetLife Inc. That sale will be completed by November 1, MetLife has said.

AIA expects operating profit of at least $2 billion for the year ending November, and operates in 15 Asian markets with 309,000 agents, 24,500 employees and more than 23 million in- force policies. The unit had about $1.78 billion in operating profit in 2009, down from $1.87 billion in 2008, according to its IPO prospectus.

Investors, including institutions and Hong Kong individuals, ordered more than HK$1 trillion worth of AIA stock, according to two people with knowledge of the matter who declined to be identified because the information is private. The Kuwait Investment Authority, Guoco Land Ltd. and Wharf Holdings Ltd. are among companies that bought stock in the IPO.