AIG sale of aircraft leasing firm to Chinese investors hits snag

Insurance giant American International Group Inc.’s attempt to sell its Century City aircraft leasing company to a consortium of Chinese investors has run into turbulence because a deposit payment was not received on schedule.

AIG revealed in a Friday filing with the Securities and Exchange Commission that the investment group failed to meet the deadline that was specified under the terms of deal to sell up to 90% of International Lease Finance Corp. for $4.8 billion.

AIG now has the right to terminate the deal, which was struck in December.

The leasing company, better known as ILFC, buys aircraft and rents them to airlines for a fixed period. It owns and manages a fleet of more than 900 aircraft.

With plush headquarters at Constellation Place, formerly known as MGM Tower, ILFC has relationships with nearly every major airline worldwide.

AIG has been trying to unload the unit since 2008, when the New York company nearly collapsed and was forced to go under government control.

But in December the Treasury sold its last AIG shares, formally ending the bailout with a $22.7-billion profit. So AIG is not under pressure to hurriedly unload ILFC.

Two weeks ago, AIG agreed to extend the deadline to close the deal to mid-July, from mid-June.

In the aviation world, little is known about the investors, called Jumbo Acquisition Ltd.

The group is composed of New China Trust Co. and China Aviation Industrial Fund, which are state-controlled, and P3 Investments Ltd., which is privately managed.

The deal is still subject to approval by the federal government.

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