American International Group Inc. may still receive $35.5 billion for an Asian division after a purchase agreement with Prudential PLC collapsed last week, the Treasury Department said.

AIG may hold an initial public offering in Hong Kong for AIA Group Ltd., the Congressional Oversight Panel said Thursday in a report, citing conversations with Jim Millstein, chief restructuring officer of the Treasury.

The March 1 deal to sell AIA to Prudential failed after the London-based insurer's investors balked at the price and AIG rejected a reduced offer.

AIG's CEO Robert Benmosche, who is selling assets to repay a $182.3 billion rescue, has options for divesting AIA, he told employees last week, without specifying them.

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