NU Online News Service, July 19, 2:59 p.m. EDT
American International Group (AIG) is apparently seeking to take advantage of a strengthening airplane-leasing market by selling part of its International Lease Finance Corp. (ILFC) unit through an initial public offering.
AIG has indicated in the past an interest in selling the non-core business, especially as it moves aggressively to buy back the U.S. government’s stake in the company.
According to a report in the Wall Street Journal, AIG has contacted investment bankers about participating in an IPO.
An AIG spokesman declined comment on the issue.
AIG has apparently been told by investment bankers that it could raise $1.5 billion to $2 billion if market conditions are favorable. That would represent an approximate 25 percent interest in ILFC, which is based in Los Angeles. The business has a book value of $8.2 billion.
Proceeds from a sale would likely go to the U.S. Treasury.
The market for ILFC shares appears to be strengthening because it mostly leases planes in the strong Asia-Middle East market, where the population is growing fastest.
Industry officials also cite the new aircraft-leasing business formed in 2010 by Steven Udvar-Hazy, former ILFC chief.
He raised over $900 million in an IPO that drew strong investor interest.
ILFC has been owned by AIG since 1990; it was founded in 1973.
Udvar-Hazy left because of differences with AIG management and Treasury and Fed officials overseeing the government’s investment in AIG.