CHARLOTTE, North Carolina (AP) — Embattled insurer American International Group Inc. said yesterday it is selling its Japanese headquarters to Nippon Life Insurance Co. for $1.2 billion in cash.

The transaction, which would be among the biggest divestitures New York-based AIG has made to reimburse the US government for its massive infusion of aid, is expected to close in the second quarter.

The 35-year-old building is 15 stories and sits on prime real estate in central Tokyo, next to the Imperial Palace. The property consists of about one acre of land, the company said.

AIG's roots in Japan extend back to 1946, and the company is now the country's biggest foreign casualty insurer.

Separately, an internal memo with the subject line "Seize the Future" cited by The Wall Street Journal noted AIG's turnaround may take some time.

In a memo dated April 23, an initiative code-named "Project Destiny" involved a 45-day review of the New York-based insurer's businesses that's supposed to lead to a multi-year restructuring plan, the report said.

AIG has received $182.5 billion in financial support from the government since September.

A large part of the memo, sent to employees by e-mail from AIG chief executive Ed Liddy, consisted of an update on the project by AIG chief restructuring officer Paula Reynolds, according to the paper.

The project may be discussed at a Congressional hearing about AIG, scheduled for tomorrow, the report said.

AIG spokesman Mark Herr said the company regularly posts "Seize the Future" memos to employees, and a recent memo did discuss restructuring efforts by the company.

In an e-mail to The Associated Press, Herr noted, that in December Liddy said: "The US government has put a five-year timeframe on our arrangements. Thus, we don't need to hold a 'fire sale'. So we are committed to identifying buyers that will honour our values and recognise the contributions of our people."

The US government provided AIG with an $85 billion loan in September. As market conditions worsened and losses piled up at the insurer, the government revised and expanded its loan package to AIG several times.

The package of loans now totals nearly $180 billion after being expanded in March when AIG reported a fourth-quarter loss of $61.7 billion, the largest ever quarterly corporate loss in US history.

During the first quarter, AIG said it lost $4.35 billion, or $1.98 per share, compared with $7.81 billion, or $3.09 per share, during the same quarter last year.

As part of the loan package, the government has also taken a roughly 80 percent stake in the insurance giant. The company is selling off a number of business units to repay part of the loan.