(By Balachander) American International Group Inc. (NYSE: AIG) agreed to sell a 90 percent interest in aircraft lessor International Lease Finance Corp. (ILFC) for roughly US$5.28 billion to a group of Chinese investors.
The New York-based insurer has stated that its ILFC subsidiary a non-core asset.
"While ILFC is an extremely strong business platform and AIG will retain a minority stake as a passive investor, the aircraft leasing business is not core to our insurance operations," AIG CEO Robert Benmosche said on Sunday.
ILFC is the world's largest independent aircraft lessor, as measured by number of aircraft owned, claims AIG on its website, with portfolio consisting of more than 1,000 owned and managed aircraft. ILFC's technologically advanced and environmentally efficient aircraft portfolio includes 787s and A350s.
AIG expects the deal to have a positive impact on its liquidity and credit profile and will enable the company to continue to focus on its core insurance businesses.
The expects to record a non-operating loss of roughly US$4.4 billion related to the sale.
The investor group is led by New China Trust Co. Ltd., China Aviation Industrial Fund and P3 Investments Ltd. has agreed to acquire 80.1 percent of ILFC for about US$4.23 billion, with an option to acquire an additional stake of 9.9 percent. ILFC employs around 560 people.
The deal is expected to be completed in the second quarter of 2013.
Credit Suisse is acting as financial advisor to the investor group related to the transaction.
AIG shares, which have been trading in the 52-week range of $22.19 to $37.67, closed 2.62 percent higher at $34.13 on Friday.