AIG will sell 80.1 percent of its International Lease Finance Corp., an aircraft lessor with 200 airline clients in 80 countries, to a Chinese-led investor group for $5.28 billion.
The group — which is led by New China Trust Co. and also includes China Aviation
Industrial Fund and P3 Investments — has the option of purchasing an additional 9.9 percent of the company. Credit Suisse served as financial advisor for the investor group.
U.S. and Chinese regulators still need to approve the deal, but officials expect the transaction to close in the second quarter of 2013.
ILFC is one of AIG's non-core assets and was thus seen as a bit superfluous, but even with the sale, officials will be able to help steer the company forward by retaining the final 10 percent ownership.
“This transaction creates a solid and strategic partnership for ILFC,” AIG Chief Executive Officer Robert Benmosche said in a statement.
“While ILFC is an extremely strong business platform and AIG will retain
a minority stake as a passive investor, the aircraft leasing business is
not core to our insurance operations. Upon completion, the transaction
will have a positive impact on AIG’s liquidity and credit profile and
will enable us to continue to focus on our core insurance businesses.”
According to the chairman of New China Trust, Weng Xianding, the company is looking forward to accelerated growth in Asia while maintaining a presence in the United States. The company will retain its Los Angeles headquarters as well as its two top employees, President Frederick Cromer and CEO Henri Courpron. When the transaction closes, the new owners will appoint a board consisting of U.S. and European industry heavyweights.
ILFC seems to be growing, even in a down market. Courpon said the company has a large delivery pipeline and opened offices in Beijing and Singapore last year to support regional growth.
“With existing management
remaining in place, the transition will be seamless," Courpron stated. "We look forward to
working with the investor group to explore new opportunities for our
business." - Jon Ross