New York (AirGuideBusiness - Business & Industry Features) Mon, Dec 10, 2012

The ILFC deal reinforces China's appetite for outbound mergers and acquisitions The Chinese consortium - made up of New China Trust, which is one-fifth owned by Barclays Bank, China Aviation Industrial Fund and P3 Investments - will buy 80.1 percent of ILFC for USD$4.23 billion, with the option to buy another 9.9 percent. An arm of Industrial and Commercial Bank of China, China's biggest bank, will join once the deal has regulatory approval. P3 Investments is led by Wing-Fai Ng, co-founder of the now defunct pan-Asia fund Primus Financial Holdings. Founded by aircraft leasing legend Steven Udvar-Hazy, who sold the company to AIG in 1990, ILFC is among the world's biggest owners of passenger jets. Its main rival is GECAS, an arm of General Electric. The deal reinforces China's appetite for outbound mergers and acquisitions, taking the country's 2012 tally to USD$56.8 billion, according to Thomson Reuters data. In the past few days alone, Canada agreed to allow CNOOC (0883.HK) to buy domestic energy company Nexen for USD$15.1 billion, and China's privately-owned Wanxiang Group won a politically sensitive auction for bankrupt electric car battery marker A123 Systems, partly funded by the US government. AIG had long wanted to float ILFC in the United States as part of a wider plan to raise money to pay back the US government, but poor market conditions shelved those plans. The sale would leave AIG with a USD$6.4 billion stake in its former Asian life insurance unit AIA Group, which is widely expected to be sold. AIG said it would record a non-operating loss of USD$4.4 billion on the ILFC sale, including a charge for tax-related items. The deal, expected to close in the 2013 second quarter, values the leasing business at USD$5.28 billion, below its end-third quarter book...

To continue reading