AIG (AIG) May IPO Air Leasing Unit, Could Be One of Largest Offerings in 2011
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American International Group Inc. (NYSE: AIG) may be aiming high with an IPO of its airplane-leasing business.
According to the Wall Street Journal Tuesday, AIG could fetch as much as $1.5 - $2.0 billion with the offering. Investment bankers are already clamoring for position.
The unit, known as International Lease Finance Corp. (ILFC), would come in as one of the largest IPOs of the year.
ILFC has a book value of $8.2 billion, but since it isn't part of its core business, AIG may part with the unit "at the right price."
A potential IPO of ILFC could happen this fall, depending on market conditions at the time. Proceeds would go to the U.S. government to further repay for it's receipt of bailout monies. WSJ notes the "Treasury is trying to recoup $11.3 billion from AIG asset dispositions in addition to $41.8 billion from selling its remaining 77 percent stake in the insurer."
Analysts following ILFC are bullish on its growth potential as much of its revenue comes from outside the U.S. Air travel is expected to expand over the next few years in Asia and the Middle East (Qatar World Cup!).
But AIG is in no hurry to sell the unit. Potential divestiture has been on the table since 2008, and with AIG regaining access to debt markets last year, the deal/IPO may be on hold just that much longer.
ILFC, after posting a profit of $895.6 million in 2009, swung to a loss of $383.8 million in 2010 on charges. This last quarter, the unit recorded net profit of $73.7 million.
According to the Wall Street Journal Tuesday, AIG could fetch as much as $1.5 - $2.0 billion with the offering. Investment bankers are already clamoring for position.
The unit, known as International Lease Finance Corp. (ILFC), would come in as one of the largest IPOs of the year.
ILFC has a book value of $8.2 billion, but since it isn't part of its core business, AIG may part with the unit "at the right price."
A potential IPO of ILFC could happen this fall, depending on market conditions at the time. Proceeds would go to the U.S. government to further repay for it's receipt of bailout monies. WSJ notes the "Treasury is trying to recoup $11.3 billion from AIG asset dispositions in addition to $41.8 billion from selling its remaining 77 percent stake in the insurer."
Analysts following ILFC are bullish on its growth potential as much of its revenue comes from outside the U.S. Air travel is expected to expand over the next few years in Asia and the Middle East (Qatar World Cup!).
But AIG is in no hurry to sell the unit. Potential divestiture has been on the table since 2008, and with AIG regaining access to debt markets last year, the deal/IPO may be on hold just that much longer.
ILFC, after posting a profit of $895.6 million in 2009, swung to a loss of $383.8 million in 2010 on charges. This last quarter, the unit recorded net profit of $73.7 million.
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