AIG Exits ILFC After 5-Year Effort, Clash With Founder
American International Group Inc. (AIG)’s sale of International Lease Finance Corp., completed yesterday, ends a quest by the insurer of more than five years to get rid of the unit. Below is a timeline of the struggles and eventual divestiture of the plane-leasing business, which was acquired in 1990 from founder Steven Udvar-Hazy for $1.16 billion and accumulated more than $20 billion in debt.
June 16, 2008: ILFC debt is cut to sell by Bank of America Corp. as AIG Chief Executive Officer Robert Willumstad seeks to recover from investment losses. “It is hard to argue that ILFC presents a good strategic fit,” analyst John Guarnera says.
June 26, 2008: Willumstad calls ILFC a core holding. AIG’s ownership helps ILFC capitalize on “opportunities when others cannot,” says Udvar-Hazy, the unit’s CEO.
Sept. 16, 2008: ILFC requests to draw the maximum $6.5 billion from credit lines as AIG is bailed out after capital fell short.
Nov. 21, 2008: Udvar-Hazy says AIG will sell ILFC to a group of investors and the unit’s management by early 2009.
Jan. 16, 2009: Carlyle Group, Kohlberg Kravis Roberts & Co., TPG Inc. and Greenbriar Equity Group LLC are bidding for ILFC, Bloomberg reports, citing people familiar with the situation.
June 3, 2009: AIG may break up ILFC, the Financial Times reports. The Federal Reserve Bank of New York is balking at suitors’ demands for funding to refinance debt, the FT says.
Oct. 13, 2009: AIG extends $2 billion in credit to ILFC, which is unable to borrow from its usual sources of funding.
Nov. 6, 2009: AIG says it accessed $4.2 billion from a Treasury Department facility to restructure ILFC and a mortgage insurer.
Dec. 18, 2009: ILFC is cut to junk by Moody’s Investors Service.
Feb. 4, 2010: Udvar-Hazy resigns as CEO.
March 16, 2010: ILFC says it’s planning its first offering of unsecured bonds in almost two years.
May 19, 2010: Ex-Airbus SAS manager Henri Courpron is named CEO, the third head since Udvar-Hazy’s exit three months earlier.
April 20, 2011: Udvar-Hazy says he’s interested in buying back ILFC after he started rival Air Lease Corp. and took it public.
Sept. 2, 2011: AIG files for an initial public offering of ILFC.
Nov. 3, 2011: AIG says ILFC’s third-quarter operating loss widened to $1.3 billion on aircraft impairments.
April 24, 2012: AIG sues Udvar-Hazy, saying he took confidential information. Air Lease calls the lawsuit “baseless.”
June 21, 2012: Courpron had a relationship with an employee, AIG says as the insurer cuts his pay and puts ex-Boeing Co. executive Laurette Koellner in charge of overseeing him.
Dec. 9, 2012: AIG says a Chinese group led by New China Trust Co. Chairman Weng Xianding agreed to buy 80 percent ILFC for about $4.23 billion. AIG says the group may be expanded to include New China Life Insurance Co. and an arm of ICBC International Holdings Ltd.
Dec. 14, 2012: New China Life has denied agreeing to join the buyer group and ICBC said it had no role in the deal, the South China Morning Post reports.
May 14, 2013: AIG CEO Robert Benmosche, who took the post in 2009, says of the ILFC deal, “We believe that we’ll have plenty of time in which to close during this quarter.”
June 4, 2013: Benmosche says, “Whether this deal will get done or not, we don’t know.”
June 21, 2013: AIG revives plans for an IPO of ILFC, which updates its registration statement with regulators.
Oct. 31, 2013: AIG says ILFC took an impairment of $1.1 billion on aircraft as clients seek more fuel-efficient planes.
Dec. 16, 2013: AerCap Holdings NV (AER) agrees to buy ILFC for about $5.4 billion in cash and stock, replacing the failed China deal.
May 14, 2014: The deal is completed in a purchase valued at $7.6 billion after a surge in the price of AerCap’s stock.