LONDON Oct 24 A private consortium is seeking
to raise a $2.1 billion syndicated loan to back the purchase of
an 81 percent stake in US insurer American International Group's
aircraft leasing unit ILFC, banking sources
said on Thursday.
AIG said in December 2012 that it had reached an agreement
to sell a stake of up to 90 percent of California-based ILFC to
a consortium of investors, based mainly in China, for $4.7
The investor group - P3 Investments and Taiwan's Fubon Group
- is now buying an 81 percent stake and AIG will hold the
remaining 19 percent, the sources said.
This proposal is still at a preliminary stage, but a draft
term sheet for a $2.1 billion acquisition loan has already been
sent to potential lenders, they added.
ILFC's employees will receive up to eight percent of the
equity interest after the acquisition, which will dilute the
private consortium's stake to 74.5 percent and AIG's stake to
17.5 percent, the sources said.
AIG could not immediately be reached for comment.
P3 Investments has been trying to raise acquisition loans in
Asia for nearly a year.
P3 has revealed only background information about the
identities of its partners, which it describes as limited
partners from regional family offices from Hong Kong and leading
financial institutions in Hong Kong, the sources said.
Potential lenders are asking for more clarity on the
consortium partners to provide funding for the acquisition.
P3's partners include a Hong Kong-based asset management
company led by Ng Wing-fai, two unnamed Hong Kong real estate
companies and the chairman of a Hong Kong diversified
conglomerate, the sources said.
Ng Wing-fai, co-founder of the now defunct pan-Asia fund
Primus Financial Holdings, was on the board of directors for
Fubon Hong Kong from 2004 to 2006.
The $2.1 billion loan is bigger than a $1.5 billion
financing that banks were originally approached about in July.
It is structured to repay in full at maturity instead of having
amortising repayments through the life of the loan as originally
proposed, the sources said.
The deadline for banks to respond has been extended until
the end of the year by co-ordinating lead banks Bank of Taiwan
and Mega International Commercial Bank.
The loan is being raised through a special purpose vehicle
called Jumbo Acquisition Ltd.
It will be priced at 500 basis points (bps) over Libor and
steps down to 425 bps if debt ratios decrease.
BNP Paribas is financial adviser to the buying consortium,
ILFC is rated Ba3 by Moody's and BBB- by Standard & Poor's.
With around 1,000 owned and managed aircraft, ILFC operates
with a global network of around 200 airlines in more than 80
countries, including major flag carriers, medium and small-sized
airlines and cargo carriers, according to the company's website.