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20 June 2024

Istithmar, others bid for AIG's aircraft leasing unit

By Reuters

Four sovereign wealth funds – including Dubai-based Istithmar and Kuwait Investment Authority – and major global private equity players have bid for American International Group's International Lease Finance Corp.

Other initial bidders for the unit, which has been valued at up to $10 billion, include Singapore's Temasek Holdings, China Investment Corp, Carlyle Group, TPG Capital and Kohlberg Kravis Roberts, the sources said.

Some other smaller private equity firms have also expressed interest, sources said.

The parties are in talks to form consortiums to bid for the unit as they grapple with funding the purchase, the sources said.

ILFC, one of the largest aircraft leasing companies in the world, owns about $55 billion (Dh202bn) worth of planes and is one of the biggest customers of both Boeing Co and Airbus, a unit of Eads .

Talks include the possibility of asking the US government to help with long-term funding, a source said. Such financing from the government could help increase what the bidders are able to pay for the unit, the source said.

The timeline of the auction is not clear, but a source said the second round of bids could come in the third week of February. AIG declined to comment. The bidders were not immediately available for comment.

ILFC is run by Steven Udvar-Hazy, considered by many as the "godfather" of the civil aviation market.

Udvar-Hazy, who founded ILFC in 1973 and sold it to AIG in 1990, is expected to stay on as the head of ILFC after the sale. Udvar-Hazy had pegged ILFC's value at $10bn, but analysts have said it could be worth $8bn. ILFC's valuations could come in even lower as airlines struggle amid weak economies and a slowdown in growth in countries such as India and China.