11-Dec-2012 8:53 AM

AIG to sell up to 90% stake in ILFC to Chinese investors, HQ to remain in Los Angeles

American International Group (AIG) and an investor group led by New China Trust Co Ltd chairman Weng Xianding entered (09-Dec-2012) into an agreement under which AIG will sell up to a 90% stake in International Lease Finance Corporation (ILFC), a non-core asset, to the investor group in a transaction that values ILFC at approximately USD5.28 billion. The investor group comprised of New China Trust Co Ltd, China Aviation Industrial Fund and P3 Investments Ltd has agreed to acquire 80.1% of ILFC for approximately USD4.23 billion, with an option to acquire an additional 9.9% stake. Upon receipt of required Chinese regulatory approvals and exercise of the option, the investor group is expected to be expanded to include New China Life Insurance Co Ltd and an investment arm of ICBC International. The transaction, which is expected to close in 2Q2013, marks another success in the disposition of AIG’s non-core assets. At closing of the transaction, AIG will retain at least a 10% ownership stake in ILFC, allowing it to continue to participate in the growth of ILFC’s unique franchise, including the benefits the investor group will bring to the company. The transaction is subject to required regulatory approvals, including all applicable US and Chinese regulatory reviews and approvals, and other customary closing conditions. When the transaction meets the criteria for “held for sale” accounting treatment, AIG expects to record a non-operating loss of approximately USD4.4 billion, which includes a non-cash charge of approximately USD1.8 billion associated with the utilisation of tax net operating loss carry forwards from this transaction. Under the new owners, ILFC will retain operational independence and continue to be headquartered in Los Angeles. ILFC CEO Henri Courpron and president Frederick S Cromer will continue to operate and manage the business. ILFC currently employs approximately 560 people, including more than 450 people based in the US, and expects to hire additional US-based staff to replace AIG-supported operations. ILFC will remain incorporated in the US following the closing of this transaction and will continue to be registered with the U.S. Securities and Exchange Commission. Credit Suisse is acting as financial advisor to the investor group in connection with this transaction, and Simpson Thacher & Bartlett is acting as legal advisor to the investor group. [more - original PR]

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