Chinese bank will fund British Airways to buy new planes
15 Oct 2007
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The Industrial and Commercial Bank of China (ICBC) will provide financing for the purchase of 36 new planes by British Airways (BA). At catalogue prices, the orders including engines are worth $8.2 billion, and BA has obtained $1.5 billion in financing for orders up to 2011.
Last month, the ICBC received regulatory approval to set up a financial leasing company. The decision came a just week before BA placed an order for 12 Airbus A380 super jumbos and 24 Boeing 787 Dreamliners in end-September.
ICBC is China's biggest lender. It launched the largest-ever initial public offering (IPO) on the Hong Kong stock exchange at $22 billion (€15.5 billion, £10.8 billion) in 2006.
These are the first aircraft bought with Chinese banks taking a frontline position in the debt structuring outside China and HongKong. Chinese banks have massive amounts of cash, as the country has a huge trade surplus. The country and its banks are now finding ways to put this cash pile to use.
