American International Group, Inc. (AIG) has entered into an agreement with an investor group led by the chairman of New China Trust Co, Weng Xianding, to sell up to 90% stake in International Lease Finance Corporation (ILFC).
The investor group, expected to be expanded to include New China Life Insurance and an investment arm of ICBC International, also comprises China Aviation Industrial Fund and P3 Investments.
The group will acquire 80.1% of ILFC for $4.23bn, with an option to purchase an additional 9.9% stake.
Sale of AIG’s non-core asset is valued at nearly $5.28bn and is subject to receipt of required Chinese regulatory approvals and exercise of the option.
Expected to close in the second quarter of 2013, the transaction will also involve AIG retaining at least a 10% ownership stake in ILFC.
"This transaction allows ILFC to continue to serve its worldwide partners in the aviation industry with world-class service while accelerating its growth in important markets, including Asia," Xianding said.
Following completion of the deal, ILFC will continue to operate independently in Los Angeles under the leadership of chief executive officer Henri Courpron and president Frederick Cromer with a new board of directors in place.
Credit Suisse served as financial advisor to the investor group, while Simpson Thacher & Bartlett acted as legal advisor.
ILFC currently employs approximately 560 people, including more than 450 people based in the US.