The Financial Post is reporting Onex Corp., one of the parent companies of Hawker Beechcraft, is reportedly making a play for International Lease Finance Corp., the world’s largest aircraft leasing company. ILFC is now owned by American International Group (AIG), which is busy shedding assets to pay off the loan portion of its $182 billion government bailout. ILFC leases airliners to most of the world’s airlines and has been a reliable cash cow for AIG since it purchased the company from founder Steven Udvar-Hazy in 1990. Onex, which bought Raytheon’s general aviation division in partnership with Goldman Sachs and renamed it Hawker Beechcraft in 2008, is a Toronto-based investment company that frequently delves into aerospace enterprises. Onex President Gerry Schwartz is characteristically tight-lipped about the ILFC bid.
Onex also owns Spirit Aerosystems, which was formerly known as Boeing’s Wichita division, and is a key contractor on the Boeing 787. Schwartz also participated in a failed bid to buy Qantas Airlines in 2006 and Air Canada in 1999. According to the Post, ILFC is doing well financially (revenues up 16 percent this year) but it’s principal asset, the credit rating that it assumed as part of AIG, has, of course, become more of a liability. Onex is reportedly looking for partners in the acquisition in a bid that will be less than the $7.8 billion book value of IFLC but will include assumption of the company’s $32 billion debt. Some of that debt comes due in October.
