AIG's Auction of Asian Arm Failing: Report

Updated from 1:37 a.m. EST

Bids for American International Group's(AIG Quote) Asian arm are due Friday and a number of prospective bidders, including HSBC Holdings(HBC Quote) and AXA SA have abandoned the process and no further bids may be forthcoming, the Wall Street Journal reports.

AIG initially intended to sell 49% of American International Assurance, which is Asia's largest life insurer with operations in 10 countries. It has since signaled it would sell the entire unit.

The Journal reports the apparent failure of the auction could explain why AIG has asked the U.S. government to restructure the terms of its bailout. A key aspect of the plan involves allowing AIG to repay some of its obligations to the government, or up to $100 billion -- with stakes in operating businesses, such as those in AIA. ...