According to three people who were familiar with the process, Chinese financier Xiao Jianhua and Taiwanese tycoon Richard Tsai had engaged in talks regarding financing of a USD4.2 billion offer for the International Lease Finance Corp. American International Group Inc intended to exit from its aircraft lessor unit. The sources added that Tsai's family would be assuming a central role in the special partnership. One of the sources also said Xiao's involvement would be mainly providing financing.
Bloomberg added that Tsai and Xiao's involvement could help the group led by Hong Kong-based P3 Investments Ltd accelerate its acquisition. The acquisition bid had been stalled for several months due to a funding gap. Moreover, AUG's divestment of its aircraft leasing unit would help the former repay bailout money to the US.
The original group of investors missed several deadlines, prompting the deal to suffer. The original investors initially agreed to pay USD4.2 billion December of last year to acquire 80% in the AIG unit. Should the original investors had met the deadline, the deal would have been completed in the second quarter of this year. One source who had knowledge of the matter earlier said one of the members of that bidding group, New China Trust Co, pulled out in May this year.
Although the makeup of the group had yet to be finalized, there are still several parties who were interested to take part in the deal, the sources said. Two of the sources noted that Tsai, who is the son of the second-richest man in Taiwan, is a limited partner in the investment fund. One of the sources clarified that the US' Committee on Foreign Investment will be able to give its approval on the sale should there be no dominant shareholder in the group.
Tsai refused to provide a comment in an email that was sent from his office. Representatives for Xiao, AIG and ILFC had also declined to release statements about the report.
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