AIG To Sell International Lease Finance To AerCap Holdings For About $5.4 Bln

(RTTNews) - Insurer American International Group, Inc. (AIG) has reached an agreement to sell its 100 percent stake in International Lease Finance Corp. (ILFC), a non-core asset, to AerCap Holdings N.V. (AER). Total deal consideration, comprising $3.0 billion cash and 97.56 million newly issued AerCap common shares, has a value of about $5.4 billion based on AerCap's closing price per share of $24.93 on December 13, 2013. The transaction, which may close in the second quarter of 2014, marks the last major disposition of AIG's non-core assets. Prior to signing a deal with AerCap, AIG discontinued the share purchase agreement with Jumbo Acquisition Ltd. for the sale of up to 90 percent of ILFC common stock.

Following the closure, the transaction would have a positive impact on AIG's liquidity and credit profile and would enable it to continue to focus on its core insurance businesses. Net cash proceeds to AIG at closing are likely to be some $2.4 billion after the settlement of intercompany loans, and are available for general corporate purposes. AIG said it would continue to present ILFC as a "held for sale" asset prior to closing, but would currently include ILFC's operating results in continuing operations given the interest in AerCap to be acquired by AIG upon the closing of the transaction. After completion, AIG hopes to recognize income from its investment in AerCap under the equity method of accounting.

In addition, AIG has agreed to provide a $1 billion, five-year unsecured revolving credit facility to the combined company, to be available as of the closing of the sale of ILFC.