Boston, MA 12/17/2013 (wallstreetpr) – American International Group Inc (NYSE:AIG) is finally getting a deal for its aircraft leasing business. The company buys aircrafts and leases them to airlines worldwide through its subsidiary International Leasing Finance Corporation (ILFC). ILFC was once considered on of the company’s most valuable assets. But of late, the company has termed it a non-core business and has tried to sell it since 2008.
American International Group Inc (NYSE:AIG) is selling ILFC for $5.4 billion to a Netherlands-based aircraft leasing firm called AerCap Holdings. The deal involves $3 billion cash transaction and 97.6 million shares of AerCap, together bringing the total transaction value to $5.4 billion. However, after settling the existing intercompany loans, AIG is expected to end the deal with $2.4 billion in net cash.
This transaction will hopefully close in the second quarter of 2014 if it gets the nod of the regulators. It will thus conclude AIG’s efforts at disposing non-core assets since it nearly went bankrupt in 2008.
Upon the completion of the deal, the company hopes to improve its liquidity, credit profile and gain more focus on its insurance business. These are some of the promises that AIG’s CEO Robert Benmosche has made to stakeholders as he seeks to consolidate the company so as to make it more profitable.
Looking at the market activity on American International Group Inc (NYSE:AIG) stock following the announcement on Dec. 16, investors seemed to agree with Benmosche as the company’s shares surged 2 percent in pre-market trading and settled up 1.11 percent to conclude the day at $50.28 per share after touching highs of $51.05 during the day. The stock is up 36.3 percent year to date.
After repaying its $180 billion bailout loan from the government, American International Group Inc (NYSE:AIG) can be seen trying to shrink from operations which it considers to be of less worth to its main objective. The company has disposed several of its assets since 2008, but ILFC could not attract a good deal up until AerCap showed up.
