American International Group (AIG) is to sign an agreement for the sale of its aircraft lessor ILFC to a consortium including AerCap and private equity firms, say market sources familiar with the matter.
A source indicates AIG is “extremely motivated” to sell the business, but the deal is complex, involving multiple parties, so “moving pieces are still possible”.
The sale could be announced next week, sources say.
Flightglobal reported on 3 December that a sale was due shortly, after senior ILFC employees had their travel plans cancelled, and were told to stay in the Los Angeles area in connection with an anticipated sale to a European lessor.
AerCap shareholder Waha Capital, through its institutional shareholder Mubadala Development, could help fund the deal, sources say.
Citibank is advising ILFC on the sale, say sources.
How much of the ILFC portfolio, if any, would be held by AIG following the deal was unclear at the time of press.
AerCap hired Goldman Sachs to explore strategic opportunities for the lessor in 2012, including a possible sale or merger.
The move would mark AerCap’s second major portfolio transaction. AerCap agreed to acquire Genesis Lease in a $300 million all-stock merger of the aircraft leasing companies in 2009. Genesis became a wholly-owned subsidiary of AerCap in 2010 as part of the $1.75 billion deal.
In December 2012, AIG agreed to sell a stake of up to 90% of ILFC to a Chinese consortium of investors, which missed deadlines in the sale process.
AerCap and ILFC are declining to comment on the possible sale.
ILFC reported a net loss of $682 million for the third quarter due to higher impairment charges. It reported a $17.6 million profit in the year-earlier period.
The lessor incurred a $1.1 billion aircraft impairment charge in the quarter relating to 36 aircraft, mainly Airbus A340-600s, compared with a $61.2 million write-down in the third quarter of 2012.
It recorded provisions for losses totalling $93.9 million related to four asset value guarantees on Airbus A340-600 aircraft.