AIG in Talks to Sell Aircraft Leasing Unit ILFS to AerCap

December 13, 2013

Insurer American International Group is in talks to sell its jet-leasing finance business to AerCap Holdings NV, according to reports.

Netherlands-based AerCap, the world’s largest independent aircraft lessor, may team up with other bidders for International Lease Finance Corp (ILFC), the reports said.

AIG has not formally terminated its agreement with the Chinese group that agreed last year to buy a majority of ILFC for about $4.2 billion, Bloomberg reported.

ILFC and AIG declined to comment on the reports.

Airline Economics magazine reported earlier that AerCap was “very close” to purchasing the ILFC portfolio in a complex deal that would see some of the older aircraft sold to other lessors.

It noted the transaction would reverse a deal by AerCap to sell its AeroTurbine airplane and engine-dismantling business to ILFC in 2011 for $228 million.

“If the deal goes through, and it is very close we are told, then AerCap will become the dominant force in aviation,” the report said.

Chief Executive Officer Robert Benmosche said in November that AIG hoped to decide on a sale or an initial public offering of ILFC in the fourth quarter.

AIG said in December 2012 that it had reached an agreement to sell a stake of up to 90 percent of California-based ILFC to a consortium of investors, based mainly in China, for $4.7 billion.

ILFC is one of the biggest aircraft lessors in the world, but has recorded big write-downs in recent years on the value of the older planes in its fleet.

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