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AIG selling off $3.7 billion of aircraft leasing firm shares

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AIG selling off $3.7 billion of aircraft leasing firm shares

American International Group Inc. plans to sell about 86.9 million ordinary shares of AerCap Holdings N.V. later this month in a transaction worth about $3.7 billion, AIG announced.

The initial sale could be followed by an additional transaction under which AIG would divest itself of all remaining AerCap shares, the company said in the Wednesday announcement. AIG has pursued a strategy of exiting non-core businesses to concentration on its property/casualty and life insurance operations since it received more than $180 billion in federal assistance starting in 2008 after its near collapse.

The total reflects proceeds of about $3.4 billion from the underwriting offering and an addition $250 million from the private sale of shares to AerCap, a Schiphol, Netherlands-based aircraft leasing company. AIG received the AerCap shares in a $7.6 billion cash and stock deal in which it sold its International Lease Finance Corp. unit to AerCap in May 2014, which gave AIG a 46% stake in AerCap. In a filing with the Securities and Exchange Commission in March, AIG said that it owned about 96.7 million shares of AerCap. In an SEC filing Wednesday, AIG said that the completion of the sale would leave it with about a 5.4% share of AerCap.

In connection with the underwritten public offering, AIG has granted the underwriters a 30-day option to purchase an additional nearly 10.7 million ordinary shares of AerCap from AIG. “Should the underwriters exercise their option in full, AIG would receive additional proceeds of approximately $0.5 billion and would no longer own any AerCap ordinary shares,” said AIG in its announcement.

“AIG has built a long track record of successfully and responsibly monetizing our non-core assets,” said AIG President and CEO Peter D. Hancock in the announcement. “We will continue to optimize the value we deliver to our shareholders by both de-risking our noncore investments and enhancing AIG's financial flexibility, as we did in deconsolidating more than $24 billion of debt in connection with the sale of International Lease Finance Corp. In addition, we are pleased that, since the time of announcement of the sale of ILFC to AerCap, the value of the transaction has increased by more than $2.2 billion.”

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