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AIG unit sale at risk

NEW YORK - A Chinese group’s purchase of ILFC, one of the world’s largest airplane leasing companies, could collapse after insurer American International Group said it did not receive a scheduled deposit payment.

Under terms of the agreement, the missed payment gives AIG the right to cancel the sale, though such a decision was not expected to be imminent. It is unclear from the agreement whether AIG would be entitled to some sort of break-up fee, and if so, how much.

AIG declined to comment, while a spokesman for the consortium was not immediately available to comment.

Missing a payment on a signed deal is highly unusual. Bankers and attorneys said it underscored the difficulties in dealing with a consortium of investors who may have differing opinions about how deals should get done and how much each party pays. The Chinese government’s involvement complicates matters even further.

“Consortiums in general pose concerns,” said Morton Pierce, a partner in the mergers and acquisitions department at law firm White & Case. “A foreign consortium adds another element of complexity.”

AIG said last December it would sell up to 90 per cent of ILFC for up to $4.8 billion.