Onex, Greenbriar consider AIG aircraft leasing bid

North American private equity firm Onex, global transportation investor Greenbriar Equity Group, the Canada Pension Plan and ILFC CEO Steven Udvar-Házy may be readying an offer as early as this week, according to the Financial Times. Credit Suisse is arranging a debt facility of over $2bn for the proposed deal.

Badly affected by the US economic crash, AIG suffered from a liquidity crisis after its credit rating was downgraded in September 2008, resulting in an $80bn rescue from the US Federal Reserve. The troubles experienced by its parent company have reportedly shut off many of ILFC’s traditional sources of funding.
 
The ILFC has provided leasing arrangements to airlines since 1973. Numerous airlines have moved towards leasing as a means of streamlining their costs in the face of a difficult operating environment. ILFC predicts that half the world aircraft fleet will be leased in the near future.

Udvar-Házy sold ILFC to AIG in 1990, and is reportedly welcoming the opportunity to start again without the burden of AIG’s government ownership and financial troubles. When no bid emerged for the entire aviation division, AIG had considered breaking up the 1,000-strong fleet, but the deal under discussion would allow the company to split its aircraft leasing portfolio into two portions of aircraft with similar value, and selling one portion to Udvar-Házy’s consortium.

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