International Lease Finance has put off plans for an initial public offering to focus on talks with a Chinese-led consortium about the sale of its leasing platform, say market sources familiar with the matter.
Also potentially supporting the news of a sale is a 15 November update in a regulatory filing that shifts control of the management of the lessor's lawsuit against Steven Udvar-Hazy and Air Lease Corporation to parent company American International Group "following any change of control of ILFC".
"AIG has sole authority to make strategic decisions regarding this litigation, although AIG will consult ILFC on significant decisions, and to direct AIG's and ILFC's outside counsel for this matter," according to the filing with the Securities and Exchange Commission.
According to media reports out today, New China Trust is leading a group of investors in a $5.5 billion bid for ILFC. Other members of the group include Industrial & Commercial Bank of China and China Aviation Industry Fund.
The lessor has been busy repairing its balance sheets during the past couple of years by paying down debt and taking aircraft impairment charges.
For the third quarter to 30 September, ILFC improved its operating income to $39 million on lower impairment charges of $98 million during the period. The results compare favourably to an operating loss of $1.3 billion in the year-earlier period, including $1.5 billion of impairment charges and fair value adjustments.
During the quarter, ILFC recorded rental revenues of $1.1 billion, essentially flat compared with the third quarter of 2011.
ILFC also raised approximately $750 million during the quarter for general corporate purposes, including the repayment of existing indebtedness and the purchase of aircraft, through the issuance of 5.875% unsecured notes due 2022.
Further, on 9 October, ILFC entered into a $2.3 billion unsecured three-year revolving credit facility with a group of 10 banks and terminated its existing $2 billion revolving credit agreement originally scheduled to expire in 2014.
ILFC could not be reached for comment.