American International Group (AIG) is reportedly in talks to sell its aircraft leasing arm to a Chinese conglomerate after missing a deadline to close the deal last month.

The sale worth $4.8bn (£3.2bn, €3.6bn) was to have been sealed on 31 July according to a Reuters report. AIG said the company was yet to receive the payment and so the deal to sell AIG's International Lease Finance (ILFC) unit had not been finalised.

Reuters mentioned some sources familiar with the matter as saying both AIG and the Chinese group were now planning to close the deal by mid-August. Both parties had the option of putting the deal on hold if it had not been agreed by 31 July.

Bloomberg reported another insider as saying that AIG was likely to pursue an initial public offering for its plane-leasing business after the deal stalled.

"The fallback is a public offering," Charles Sebaski, an analyst at BMO Capital Markets told Bloomberg. "I don't think there's a likely other acquirer out there for this asset."

The move to sell the company's subsidiary comes after Chief Executive Officer Robert Benmosche repaid loan from a US bailout last year, and since then has been desperate to sell its Los Angeles-based ILFC to reduce the debt and streamline the company.

The funds earned from the sale could help the American insurer restore dividends or buy back shares.

The New China Trust, one-fifth of which is owned by Barclays, P3 Investments and China Aviation Industrial Fund was the group which missed the deadline to close the deal earlier.

The Chinese consortium decided to buy at least 80% of AIG's ILFC unit towards the end of last year.

AIG updated the registration statement for an initial public offering of ILFC on 21 June. The insurer is trying to keep all its options open while also trying to sell to a buyer or float an IPO for the business, media reported.

AIG bought ILFC in 1990 for $1.16bn from founder Steven Udvar-Hazy, according Bloomberg data.