American International Group, moving ahead with asset sales, has received the first round of bids for its aircraft leasing unit, and is expected to start shopping its asset management business soon, people familiar with the matter said on Monday.

AIG has received the first round of bids for its International Lease Finance unit and the sale process is now in the early due diligence stage, the sources said, adding that the process is fluid and the timeline was unclear. The sale is being handled by investment bank Moelis & Co.

AIG has also retained UBS to sell its asset management business, and books are expected to go out shortly, possibly as early as this week, sources said.

The third-party asset management business rests within AIG Investments, which had $111.5bn in client assets under management overall as of 30 September.

AIG declined to comment.

Last month, AIG agreed to sell its private banking unit, another business within its Asset Management group, to Abu Dhabi-based Aabar Investments PJSC for $254m.

AIG, once the world’s biggest insurer by market value, averted bankruptcy in September with an $85bn federal bailout. The rescue later swelled to about $152bn.

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AIG has said it plans to sell everything except its US property and casualty business, foreign general insurance, and an ownership interest in some foreign life operations.

Blackstone Group LP is the global coordinator for the sale of AIG’s assets.

Last week, a source said AIG was close to a deal to sell its Canadian life insurance business and an announcement could come this week. And last month, the insurer agreed to sell HSB Group to German reinsurer Munich Re for $742m.

Consortium weighed

AIG has started selling assets, but is doing so at a difficult time as the financial crisis crimps the ability of any would-be buyers to complete deals.

“There are not a lot of firms that are awash with cash,” said Donald Light, an insurance analyst at Celent. “The strength in negotiations lies with the buyer, and there are fewer buyers out there.”

The HSB sale came under fire from Maurice Greenberg, the former AIG chief executive, who said the price was ‘distressed’ and sought an explanation from the AIG board for the sale process.

Edward Liddy, AIG’s CEO since the bailout, has said the company will not sell assets at fire-sale prices. The terms of the revised bailout package also gives AIG more breathing room to pay the back the government.

Still, selling ILFC, one of the world’s largest aircraft leasing companies, could prove to be a challenge. Analysts have said the business could be worth as much as $8bn.

The possibility of forming a consortium to buy the unit is being looked at, the sources said.

“Figuring out the funding is the key part here,” one source said.

ILFC, run by Steven Udvar-Hazy, who is considered the godfather of the civil aviation market, owns about $55 billion worth of planes and is one of the biggest customers of both Boeing and Airbus, a unit of EADS.

ILFC relied on AIG’s blue-chip credit rating for access to cheap capital for buying planes, but was locked out of the debt market in September due to the insurer’s troubles.

AIG’s shares closed down 5% at $1.54 on the New York Stock Exchange. They hit a 52-week high of $59.42 last January.

By Paritosh Bansal, Reiters.