AIG has agreed to sell 90% of its aeroplane leasing business to a group of Chinese investors in a $5.8 billion deal, the New York Times reports. The investors include the New China Trust Company, the China Aviation Industrial Fund and P3 Investments.
The American insurance giant has been selling off assets since it was bailed out during the financial crisis in 2008. But this sale is important for a few reasons:
- The company for sale The International Lease Finance Corporation (ILFC), has been around fo 40 years and is one of the biggest aeroplane leasing companies in the world. It has 200 airlines customers at in 80 countries and has over 900 planes.
- This will be one of the biggest acquisitions of an American company by Chinese investors in history. That said, expect a lot of scrutiny from Chinese and American regulators.
A few more things you should know — AIG CEO Bob Benmosche will keep a seat on ILFC and the AIG will retain a 10% in IFLC.
AIG will also record a loss of about $4.4 billion here, and a part of that is related to a $1.8 billion accounting charge from using tax assets in the deal.