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Thu, Jul 21, 2011

AIG Looks To Sell ILFC

But Buyers Reportedly Lukewarm Based On Price, Fleet Age

International Leasing Finance Corporation is the largest company in the world involved in the buying and leasing of commercial jetliners, but ILFC parent AIG has made no secret of the fact that it wants to divest itself of the aircraft leasing business, and plans an IPO for roughly 25% of the company worth up to $2 billion.

But there is apparently some turbulence along the intended route of flight; potential buyers look at the age of ILFC's fleet and the potential for default by its customers, and have expressed only lukewarm interest in the deal.

Reuters reports that while AIG has said for some time that aircraft leasing is not among the core businesses for the recently-bailed-out insurance giant, chairman Steve Miller says prospective buyers say the company is over-valued at some $8 billion. Financing could also be a problem, Miller said, because "no one's really sure where the economy is headed."

Steven Udvar-Hazy, the founder if ILFC and current CEO of Air Lease, reportedly has said he would be interested in buying the company back from AIG, but industry analysts seem to doubt that he has the juice to pull off the deal.

The age of the company's fleet is also a potential issue, the news service reports. The company has 933 planes, but retail values are eroding as planemakers improve fuel efficiency in newer models.

Analysts also say that there may also soon be a glut of aircraft leasing companies on the market. To that end, they say, AIG would do well to sell ILFC sooner rather than later.

FMI: www.ilfc.com

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