AIG reportedly considering an initial public offering of aircraft leasing firm
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American International Group Inc. is considering whether or not to sell part of Century City aircraft leasing giant International Lease Finance Corp. through an initial public offering, according to reports.
The New York Times and Wall Street Journal, citing unnamed sources, wrote that investment bankers have approached AIG about selling part of the unit, considered by many analysts as one of AIG’s crown jewels.
According to the Journal:
Investment bankers have told AIG that an IPO of the business known as International Lease Finance Corp. could raise $1.5 billion to $2 billion if market conditions are favorable, according to the people. That would represent a sale of roughly 25% of Los Angeles-based ILFC and rank as one of the largest IPOs in the U.S. so far this year.
In 2008, the New York-based insurance corporation received $182.5 billion in bailout money during the global financial crisis. AIG has been selling off business units in an attempt to pay back the federal government.
AIG has hinted at selling the aircraft leasing company, known as ILFC, in the past, but has been unable to close a deal.
For decades, ILFC has been an industry leader in aircraft leasing -- the business of buying planes and renting them to airlines. But the company fell on hard times when AIG nearly collapsed in 2008, which pinned both AIG and ILFC under government control and placed restrictions on the amount of money executives could make.
That confinement caused a mass exodus of ILFC’s management team. The biggest blow came in February 2010 when company co-founder and then-Chief Executive Steven Udvar-Hazy abruptly left to start a rival business, Air Lease Corp., also based in Century City.
ILFC is one of the world’s largest aircraft leasing firms with a fleet of about 930 aircraft. The company posted $4.7 billion in revenue last year.
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-- W.J. Hennigan
