A subsidiary of Aviation Industry Corporation of China (AVIC) is in talks to buy Dublin-based aircraft leasing firm Avolon, confirming media reports that takeover discussions were under way. 

AVIC Capital has been in talks with relevant parties on the acquisition of Avolon and conducted initial due diligence, it said in a statement to the Shanghai Stock Exchange website. 

However, it denied a report in a Chinese newspaper on August 8 that valued the deal at about €12 billion. 

"The size of the deal mentioned by the newspaper report is not accurate," the statement said. 

AVIC also said it remained in talks with relevant parties but that no deal had been reached yet. "There is still uncertainty that a deal can be completed," the statement said. 

Citing sources, Reuters reported this week that China Investment Corp, the country's $653 billion sovereign wealth fund, and AVIC were in talks to buy Avolon for $4-5 billion including debt. 

Avolon was estimated to have an equity value of around $2.5 billion, the sources said. 

Avolon is backed by private equity firms Cinven, CVC Capital Partners and Oak Hill Capital Partners, as well as Singapore's sovereign wealth fund.