AIG's plan to sell plane-leasing unit moves ahead

AIG gets deposit from China buyers of plane-leasing unit, as deal appears back on track

Associated Press

NEW YORK (AP) -- AIG's plan to sell its airplane-leasing unit to Chinese investors appears to be back on track.

The insurance giant said in a regulatory filing Wednesday that it had received a deposit related to the sale of International Lease Finance Corp. It didn't provide details, and a company spokesman declined to comment.

American International Group has been undergoing a massive restructuring after nearly collapsing in the financial crisis, and getting propped up by government bailout loans that it has since repaid. It has been chucking units like the plane-leasing business to focus on its core business of writing insurance.

AIG said in December that it would sell up to 90 percent of ILFC to a group of Chinese investors that included New China Trust Co. Ltd., China Aviation Industrial Fund and P3 Investments Ltd.

The Chinese investors agreed to pay $4.2 billion for 80.1 percent of ILFC, and $4.8 billion if they decide to buy 90 percent. AIG will keep at least a 10-percent stake in ILFC.

AIG said Friday that it had not received the deposit that was due, raising the possibility of the deal's derailment and sending the stock down nearly 4 percent. The deposit was to be for 10 percent of the total price, according to the agreement signed in December.

AIG shares were off 21 cents to $43.91 at midday on a down day for the broader market.

ILFC owns or manages more than 1,000 aircraft that it leases to airlines and other customers in approximately 80 countries, according to the December announcement. Under the new owners, ILFC will continue to operate out of Los Angeles and retain "operational independence," AIG has said that a new board of directors will be appointed.

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