The first piece of the American International Group conglomerateto be sold off, as the company moves to repay its $85 billiongovernment loan, is a share in a small London airport, it wasannounced yesterday.

Due for acquisition for an undisclosed amount is theAIG-Financial Products' 50 percent interest in London City Airport.The transaction is expected to close sometime this month. The buyeris Stamford, Conn.-based Global Infrastructure Partners of New Yorkand London.

AIG Financial Products Corp., based in Wilton, Conn., and GlobalInfrastructure originally invested in the airport on Oct. 11, 2006,with each taking a half-interest.

The acquisition will bring Global Infrastructure's ownershipinterest in London City Airport to 100 percent.

Global Infrastructure is an independent fund that investsworldwide in infrastructure assets in both Organisation forEconomic Co-operation and Development nations, and select emergingmarket countries.

The firm, which also has offices in New York, London and HongKong, said it targets investments in air transport infrastructure,single assets, and portfolios of assets and companies in power andutilities, natural resources infrastructure, ports, rail, waterdistribution and treatment, and waste management.

London City Airport, located at the Royal Docks in the EastLondon borough of Newham, home to Canary Wharf. The facilitydescribes itself as the United Kingdom's leading business airport,with 10 airlines serving 33 destinations across the U.K. andEurope, as well as connections to the rest of the world throughmajor European hubs.

The London City Airport was on a list of possible AIG propertiesthat J.P. Morgan Equity analysts said last Friday the company wouldbe interested in selling.

The analysts also mentioned the ILFC, consumer finance, capitalmarkets (AIGFP), mortgage insurance, and asset managementbusinesses.

The company, in J.P. Morgan's opinion, will be able to sell theILFC and brokerage/asset management units, but current marketconditions will challenge the disposal of the capital markets,consumer finance, and mortgage insurance businesses.

It was suggested that the company could also sell its 59 percentownership stake in TransAtlantic Holdings and some of its publicand private equity holdings (Blackstone ownership, London Cityairport stake, Dubai Ports stake, among others) with relativeease.

Among its domestic insurance businesses, the company could tryto sell its home service, group life-health, reinsurance (59percent stake in TransAtlantic), and personal lines segments,according to the analysts.

AIG Chief Executive Edward Liddy is due to outline more plansfor disposal of assets this coming Friday. The company was forcedto sell a 79.9 percent interest to the government in exchange forits bailout loan after it ran into liquidity problems related tothe collapse of the subprime mortgage market.