Sumitomo Mitsui, Orix Said to Weigh Bids for AIG’s Planes

Sumitomo Mitsui Financial Group Inc. (8316) and Orix Corp. (8591) are considering making bids for aircraft owned by American International Group Inc.’s aircraft-leasing unit, two people with knowledge of the matter said.

Sumitomo Mitsui’s banking unit is interested in buying 300 planes owned by AIG (AIG)’s International Lease Finance Corp. for about $1 billion, said one person, who asked not to be named because the deliberations are private. Orix is considering teaming up with other investors to purchase about 100 aircraft, or around a 10th of ILFC’s fleet, the other person said.

AIG agreed in December to sell 80 percent of ILFC to a group of investors for $4.2 billion, though that deal has been delayed as the consortium missed payment deadlines. The transaction suffered a setback as New China Trust Co. left the investor group, and the remaining bidders have yet to finish raising money for the purchase, a person with knowledge of the matter said this month.

Sumitomo Mitsui, Japan’s second-biggest bank by market value, last year paid $7.3 billion for Royal Bank of Scotland Group Plc (RBS)’s aviation division.

Orix, which offers services ranging from leasing and insurance to real estate and private equity, has an aviation unit in Dublin. Orix Aviation Systems Ltd. owns more than 170 commercial jet aircraft and spare engines valued at more than $4 billion, according to its website.

Sohei Nishimaki, a Tokyo-based spokesman for Sumitomo Mitsui, wasn’t immediately able to comment. Atsushi Horii, a spokesman for Orix in Tokyo, declined to comment. Calvin Lee, a spokesman for AIG in Hong Kong, didn’t immediately return a call.

AIG’s Move

Neither company is in formal talks with AIG, the people said. Sumitomo Mitsui and Orix, both based in Tokyo, are waiting to see whether AIG abandons the deal with the investor group, or whether the New York-based company chooses to pursue an initial public offering of ILFC, according to the people.

AIG retains an option to terminate the deal with the investor group, now led by Hong Kong-based P3 Investments Ltd., a person familiar with the matter said this month. ILFC owned or operated a fleet of about 1,000 aircraft as of March 31, according to a regulatory filing.

To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Shigeru Sato in Tokyo at ssato10@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Chitra Somayaji at csomayaji@bloomberg.net

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