AIG’s AerCap Stake No Hot Potato as CEO Says Time Is on Our SideJing Cao and Zachary Tracer
American International Group Inc. can take its time to sell down a stake in plane-lessor AerCap Holdings NV, said Peter Hancock, the chief executive officer of the insurer.
“On the face of it, it would seem like a hot potato,” Hancock said Friday on a conference call with analysts. “I would not describe it that way.”
Hancock would sell AerCap stock if a “favorable offer” comes along, he told investors. AIG ended up with a 46 percent stake in AerCap as part of the insurer’s deal to sell its own plane business, International Lease Finance Corp., to the Schiphol, Netherlands-based firm last year. Restrictions on selling down the stake began expiring this month.
“I think we’ve had a good track record over the last five years of making very thoughtful disposal decisions,” Hancock said. “A patient approach to disposing of this non-core asset is what we think makes sense.”
AIG used four underwritten offerings to dispose of shares in Hong Kong-based life insurer AIA Group Ltd., raising about $35 billion. The company sold more than $79 billion of assets to help repay a U.S. bailout and had been working to exit ILFC since 2008.
An earlier agreement to sell ILFC to a group of Chinese investors collapsed before AIG struck the deal with AerCap. The insurer got about 97.6 million shares of AerCap and $3 billion in cash when the transaction was completed in May.
The insurer advanced 0.8 percent to $52.86 at 9:54 a.m. in New York. AerCap rose 0.2 percent to $42.50.
AIG said Friday it’s targeting $6 billion to $7 billion of share dividends and buybacks this year. That figure doesn’t include proceeds of a potential sale of AerCap shares, AIG said. AIG’s stake in AerCap is valued at more than $4 billion.