The first piece of the American International Group conglomerate to be sold off, as the company moves to repay its $85 billion government loan, is a share in a small London airport, it was announced yesterday.

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

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

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

Global Infrastructure is an independent fund that invests worldwide in infrastructure assets in both Organisation for Economic Co-operation and Development nations, and select emerging market countries.

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

London City Airport, located at the Royal Docks in the East London borough of Newham, home to Canary Wharf. The facility describes itself as the United Kingdom's leading business airport, with 10 airlines serving 33 destinations across the U.K. and Europe, as well as connections to the rest of the world through major European hubs.

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

The analysts also mentioned the ILFC, consumer finance, capital markets (AIGFP), mortgage insurance, and asset management businesses.

The company, in J.P. Morgan's opinion, will be able to sell the ILFC and brokerage/asset management units, but current market conditions 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 percent ownership stake in TransAtlantic Holdings and some of its public and private equity holdings (Blackstone ownership, London City airport stake, Dubai Ports stake, among others) with relative ease.

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

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

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