American International Group, Inc. (AIG: Quote) announced that it has agreed to sell up to a 90% stake in International Lease Finance Corporation or ILFC to an investor group led by Weng Xianding, the Chairman of New China Trust Co. Ltd. The transaction, which is expected to close in the second quarter of 2013, values ILFC at around $5.28 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 $4.23 billion, with an option to acquire an additional 9.9% stake. 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.
When the transaction meets the criteria for "held for sale" accounting treatment, AIG expects to record a non-operating loss of approximately $4.4 billion, which includes a non-cash charge of approximately $1.8 billion.
Under new owners, ILFC will retain operational independence and continue to be headquartered in Los Angeles, CA. ILFC's Chief Executive Officer Henri Courpron and President Frederick S. Cromer will continue to operate and manage the business. ILFC expects to hire additional U.S.-based staff to replace AIG-supported operations. Upon closing, the majority of the new Board will include leading independent U.S. and European aerospace and financial industry experts, including Benmosche from AIG.
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by RTT Staff Writer
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