American International Group Inc. probably will hold an initial public offering for its aircraft- leasing business next year if financial markets stabilize, the unit’s chief executive officer said.
International Lease Finance Corp. (AIG:US) would have faced a difficult IPO amid the unresolved questions ahead of today’s U.S. presidential election and the so-called fiscal cliff of spending cuts and tax increases looming in January, CEO Henri Courpron said yesterday. Europe’s debt crisis also is roiling financial markets, he said.
“You would like to see a few months, if not quarters, of stability,” Courpron said in a telephone interview. Waiting may provide “some confidence that by the time you get to the finish line, the market is receptive to a large IPO like ILFC.”
Considering those obstacles, the stock probably won’t be offered to the public until 2013, Courpron said. New York-based AIG plans to sell “something in excess of 50 percent of ILFC,” and that would be a multibillion-dollar IPO, he said.
AIG said in September 2011 it plans to sell more than 20 percent of ILFC in an IPO and divest most of the unit over time. Now, with AIG’s own condition improved and some shares repurchased from the U.S. government, the insurer isn’t in a hurry to cut its stake, ILFC President Fred Cromer said.
“The good news is they’re not in a position where they’re forced to go,” Cromer said. “As long as the market is choppy and uncertain and that’s not going to give them what they’re looking for, they can be patient.”
The U.S. recovered its full $182.3 billion commitment from a four-year bailout of AIG, and garnered $12.4 billion in profit, after a fifth share sale in September.
ILFC has raised more than $23 billion in liquidity in the past several years and ended the most recent quarter with $2.6 billion in cash, Courpron said.
The company had 918 aircraft in its leased fleet as of September, with a book value of $34.9 billion, according to its most recent quarterly report. Los Angeles-based ILFC has more than 200 on firm order, including Boeing Co. (BA:US)’s 787 Dreamliner and Airbus SAS’s new A320neo.
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