AIG in talks to sell part of ILFC to Hazy

AIG in talks to sell part of ILFC to Hazy


NEW YORK, Oct 12 (Reuters) - American International Group Inc (AIG.N) is in talks with a group led by International Lease Finance Corp Chief Executive Steven Udvar-Hazy to sell them some aircraft from the lessor's fleet, sources familiar with the matter said.

Udvar-Hazy is backed by a consortium that includes private equity firms Onex Corp (OCX.TO) and Greenbriar Equity Group, the sources said, declining to be named because talks are private.

Under the deal being discussed now, the group, which also includes some other ILFC executives, would buy less than 10 percent of the lessor's fleet, one of the sources said.

ILFC owns a portfolio consisting of more than 1,000 aircraft, with a book value of more than $40 billion.

A transaction is not imminent and parties are still locked in negotiations over price and other issues, the source said, adding that a deal, if it happens, could take another 30 to 45 days.

The sale of ILFC, which has been in the works for nearly a year, has been slowed after AIG appointed a new chief executive this summer.

AIG CEO Robert Benmosche is "taking a more wait and see approach," but he has given the green light to continue talks with the Udvar-Hazy group, the source said.

AIG plans to keep the rest of ILFC, hoping to fix the balance sheet and tap the equity value in the future through a sale, initial public offering or other means, the source said.

The insurer is hoping that selling the aircraft to Udvar-Hazy will help it deal with ILFC's liquidity problems, the source said.

AIG declined to comment.

Its shares were up 25 cents at $44.47 in late trading on the New York Stock Exchange.

reuters