DOUBTS SURROUND AIG’S SALE IN AIRCRAFT-LEASING UNIT

AIG’s proposed $4.2bn sale of its International Lease Finance Corp aircraft-leasing unit hit a snag last week when the Chinese consortium that agreed to buy the operation missed a deadline for the payment of a 10% deposit on the deal, AIG disclosed in a federal filing. News of the missed payment comes two weeks after AIG and the buyers agreed to a one-month extension for the closing the deal, until mid-June. While the agreement gives AIG the right to scuttle the deal over the missed payment, an unidentified source told the Wall Street Journal that AIG still intends to complete the transaction by end-June. ILFC is one of the non-core operations that AIG has been seeking to sell since the 2008 bailout of the New York-based group by the US government. When the sale was first agreed in December, the consortium consisted of financial services firms New China Trust, China Aviation Industrial Fund and P3 Investments but the group subsequently gave two more buyers – New China Life Insurance and a unit of the ICBC banking group – an option to buy another 9.9% stake. It remains unclear what companies remain in the consortium. With disclosure of the missed payment, AIG’s shares lost 3.79% in value to close at $44.46 in Friday’s trading.