AIG to sell Century City aircraft leasing firm to Chinese investors
WASHINGTON -- American International Group announced it is selling a majority stake in its Century City aircraft leasing company to Chinese investors as the insurance giant continued to shed non-essential assets to help pay off its government bailout money.
AIG has been trying to sell International Lease Finance Corp. since the 2008 financial crisis. The firm owns or manages more than 1,000 aircraft, which it rents to nearly every major airline worldwide.
The aircraft leasing company’s headquarters will remain in Los Angeles, according to AIG and the investor group led by Weng Xianding, chairman of New China Trust Co. They announced the sale late on Sunday.
The Chinese investors, which also include China Aviation Industrial Fund and P3 Investments, have agreed to buy 80.1% of the company, known as ILFC, for about $4.23 billion. They have an option to acquire an additional 9.9% stake.
The deal values the company at $5.28 billion.
AIG will keep at least 10% of ILFC. The sale, which faces regulator reviews in the U.S. and China, is expected to close in the spring.
“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,” AIG Chief Executive Robert Benmosche said.
“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,” he said.
AIG has been making asset sales to pay off about $125 billion in bailout money it received from the Treasury Department and the Federal Reserve.
Treasury officials said in September that the government had made a $15.1 billion profit as it has been selling shares of AIG to reduce the taxpayer-owned stake to 15.9% from a high of 92%.
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