Mon, Oct 15, 2007 - Page 12 News List

ICBC provides debt financing for BA's purchase of 36 jets

AFP , LONDON

The Industrial and Commercial Bank of China (ICBC, 中國工商銀行) has provided debt financing for the purchase of 36 new planes by British Airways (BA), the Sunday Telegraph reported.

The paper said the bank was one of the lead debt providers on the deal last month, which came shortly after ICBC received regulatory approval to set up a financial leasing company.

Analysts said authorities, in giving ICBC the green light, were trying to encourage a revival in the sector.

The decision came a week before BA placed an order for 12 Airbus A380s and 24 Boeing 747 planes at the end of last month.

"These are the first aircraft that have been bought where Chinese banks have taken a front-line position in the debt structure, outside their domestic market," an unnamed aviation industry source told the paper.

"Chinese banks are recipients of massive amounts of cash. The country has a huge trade surplus. The country and its banks need to find something to do with it," the source said.

ICBC, China's biggest lender, came to market on the Hong Kong stock exchange last year in the largest ever initial public offering at US$22 billion (15.5 billion euros).

At catalogue price, the orders were worth US$8.2 billion.

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