ILFC Files IPO Papers

 - September 12, 2011, 9:20 AM
ILFC in March became the first customer for Airbus’ A321neo as part of a new agreement for 100 A320neo series aircraft. (Photo: Airbus)

Insurance giant AIG appeared closer to proceeding with plans to wind down its exposure to the aircraft leasing business when on September 2 its ILFC unit filed a registration statement with the U.S. Securities and Exchange Commission for a proposed initial public offering. Although in an internal note to employees, ILFC chief executive Henri Courpron reportedly wrote AIG hasn’t yet formally decided to pursue an IPO, he characterized the filing as an important step in preparing for one and an opportunity for AIG to take full advantage of its ownership of ILFC. 

Before the IPO proceeds, “and subject to certain conditions,” ILFC would become a direct subsidiary of ILFC Holdings, which AIG formed solely to advance the IPO.

The offering would consist of shares of ILFC Holdings’ common stock sold by AIG Capital. The company said in a statement that it hadn’t yet determined the number of shares it plans to offer, the price range or the timing for the proposed offering. However, AIG has said it plans to sell more than 20 percent of its stake in the company and dispose of at least 80 percent of its interest within three years of the offering. AIG chief executive Robert Benmosche last month placed the value of the business at some $8 billion, a figure he opined no one could afford.

Nevertheless, ILFC founder and former chairman and CEO Steven Udvar Hazy has expressed interest in buying the company. The company Hazy established in February 2010, ILFC rival Air Lease Corp., went public this past April, raising $802.5 million in the process.

One of the most important customers of both Airbus and Boeing, ILFC controls a portfolio of more than 1,000 owned and managed jets, and holds orders for more than 230 new aircraft worth an estimated $17.6 billion.

The ILFC filing came as Australia’s Macquarie Group prepared to participate in a bid for the aircraft leasing business of the Royal Bank of Scotland. That deal, potentially valued at $8 billion, could make Macquarie Group the world’s third-largest airplane lessor.