According to the Financial Times on Sunday, beleaguered insurer American International Group, Inc. (AIG) is nearing the bidding stage for about 50% stake in its aircraft leasing unit, International Lease Finance Corp. or ILFC. AIG has reportedly set December 3 deadline for the bids and hoped to finalize a deal by December 15, which could now take longer.
New York-based AIG, that has been trying to unload ILFC for sometime, has been unable to attract a buyer for the entire aviation division from last year. AIG is now considering breaking up the unit and to sell parts of it. ILFC currently owns about 1,000 aircraft, most of which are leased to commercial airlines world-wide. The company is the largest customer of Boeing Co.'s (BA) 787 Dreamliner, with an order for 74 of these aircraft.
Founded in 1973 by the father and son duo of Leslie Gonda and Louis Gonda along with Steven Udvar-Hazy, Los Angeles-based ILFC is the world's largest aircraft lessor by value. The company was acquired by AIG in 1990, although the unit is still run by Udvar-Hazy as its co-founder, chairman and chief executive officer.
According to the report, Udvar-Hazy would be making a bid for about half of the unit along with Onex Corp. of Canada , New York-based Greenbriar Equity Group LLC and the Canada Pension Plan. Credit Suisse is arranging a debt facility of more than $2 billion for the deal.
Reports emanated in August that Udvar-Hazy was in early talks with the company to buy a part of the unit in order start afresh with a new aircraft leasing company, without AIG's debt burdens and government control. Meanwhile, the government has been reluctant to allow Udvar-Házy to take ILFC's most valuable aircraft assets and leave less desirable assets. This could lead to AIG struggling to unload the other part even if debt market conditions continue to improve.
The government might ease those concerns by splitting the unit into two similar portions and sell one portion to the Udvar-Hazy led consortium. However, the potential deal would require final approval of both the government and AIG. If finalized, proceeds from the sale would be utilized to pay down AIG's debt obligations tied to the company's bailout by the government.
Earlier in the year, ILFC was reportedly in advanced talks with several consortia of potential buyers that included Carlyle Group, Thomas H. Lee Partners, Onex and Greenbriar Equity Group. In April, three investment groups submitted bids to acquire ILFC for less than $5 billion, the Financial Times reported. These bidders were Thomas Lee Partners and Carlyle Group led consortium, and Onex and Greenbriar headed consortium. The third bidder's identity could not be determined at that time, the report noted.
AIG, once the world's largest insurer, almost collapsed in mid-September 2008 after rating downgrades forced the company to post collateral on credit-default swaps which banks bought from the insurer to protect against losses on fixed-income holdings.
AIG has received more than $180 billion in bailout money from the federal government, who now owns a 79.9% stake in the company. The insurer was deemed by the government as too important to fail as its collapse could have wreaked havoc on the entire financial system and turned disastrous for the U.S. economy.
With the economic conditions seemingly improving, AIG reported in early November its second straight quarterly profit for the third quarter, after six straight quarters of posting losses, helped by a recovery in the value of its investments. Net income was $92 million or $0.68 per share, compared to a net loss of $24.47 billion or $181.02 per share in the year-ago quarter. Adjusted net income was $385 million or $2.85 per share, compared to adjusted net loss was $9.24 billion or $68.36 per share in the prior-year quarter.
ILFC reported a 19.3% increase in operating income to $365 million for the third quarter from $306 million a year ago, driven primarily by a larger aircraft fleet and lower composite borrowing rates compared to the prior-year quarter.
However, the company said it expects continued volatility in reported results in the coming quarters, due in part to charges related to ongoing restructuring activities. AIG is presently in the process of consolidation by selling assets and spinning off some subsidiaries to repay bailout loans received earlier from the federal government. The insurer has so far announced about $9.3 billion in asset sales since its fall-out in last September. However, the company faces troubles in finding good bidders for its assets amid the difficult economic conditions.
AIG closed Friday's trading session at $33.30, down $1.38 or 3.98% on a volume of 4.21 million shares, sharply lower than the three-month average volume of 36.83 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.