NU Online News Service, Feb. 8, 11:29 a.m. EST
Steven Udvar-Hazy, the founder of American International Group's troubled International Lease Finance Corporation, has resigned as chief executive and member of its board, AIG said.
AIG officials said Friday that the ILFC board is considering the long-term management of the aircraft leasing company, and that in the interim, President John Plueger will succeed Mr. Udvar-Hazy as acting CEO.
Robert Benmosche, AIG CEO, said that AIG expects a smooth transition.
He said Mr. Plueger has worked at ILFC for 23 years and has served as its president and chief operating officer since 1995.
In his current role, Mr. Plueger has been responsible for organizing ILFC's worldwide sales and marketing efforts, its relationships with the major airframe and engine manufacturers, and all company support for those activities, Mr. Benmosche said.
Mr. Udvar-Hazy founded ILFC in 1973 with Leslie and Lou Gonda, and has run the company since AIG acquired it in 1990.
He left the company just 10 days after Standard & Poor's cut its ratings on ILFC, the aircraft leasing unit of American International Group, saying that AIG may hold out for years before selling the company.
The rating agency cut ILFC's corporate credit rating two steps to "BBB-minus (good)," the lowest investment grade, and cut its unsecured debt three steps to "BB-plus (marginal)," the highest junk rating.
ILFC is one of AIG's most troubled units.
It is having difficulty finding a buyer for ILFC because the leasing company has a debt load of around $30 billion and the worldwide aviation industry is struggling.
According to S&P, ILFC is relying on advances from AIG to fund itself due to uncertainty over its future and since disturbances in credit markets left it unable to fund itself at an affordable rate.
Meanwhile, the company is also borrowing in the secured credit markets, which is subordinating its unsecured debt, S&P said.
The parent company is 79.9 percent owned by the government and has a financial lifeline from the Federal Reserve Board and Treasury Department that at one point in late 2008 reached as high as $182 billion.
