AirAsia signs US$1bil pact with China's ICBC

by **Cals** Mon 07 Oct 2013, 00:36

Published: Saturday October 5, 2013 MYT 12:00:00 AM
Updated: Saturday October 5, 2013 MYT 12:34:43 PM
AirAsia signs US$1bil pact with China's ICBC

KUALA LUMPUR: AirAsia Bhd and ICBC Financial Leasing Co Ltd have signed a memorandum of agreement (MoA) for aircraft financing facilities worth US$1bil (RM3.18bil).
The historical signing, marking the largest financial cooperation yet between Malaysia and China, was witnessed by Prime Minister Datuk Seri Najib Tun Razak and President of China, Xi Jinping.
“This is another significant milestone for AirAsia and proudly, another innovation at work. The signing of the MoA establishes the level of confidence that ICBC Leasing has, as a global financial institution, on our current business and future potential,”AirAsia Group chief executive officer Tan Sri Tony Fernandes said.
“This US$1bil financing facility agreement does not only reflect a successful bilateral business arrangement, but also underlines the excellent relationship between Malaysia and China,” he added.
Since the beginning of 2011, AirAsia has had sale-and-leaseback, operating lease and finance lease arrangements for 10 A320s aircraft valued at US$800mil with ICBC Leasing and ICBC overseas subsidiary.
With the MoA, ICBC Leasing or ICBC’s overseas subsidiaries will provide AirAsia with competitive financial facilities to acquire A320 aircraft for the airline’s operational needs, in the form of finance lease, sale-and-leaseback or commercial loans.
The number of aircraft to be acquired should be no less than 10, according to the term of the letter of intent. AirAsia and ICBC Leasing will cooperate in the lease ofA320s in batches acquired from ICBC Leasing. Leased aircraft will consist of A320sassembled by Airbus (Tianjin) Final Assembly Co Ltd.
ICBC senior executive vice-president Zhang Hongli, who signed the MoA on behalf of ICBC Leasing, said: “As opposed to directly exporting the aircraft, leasing the aircraft helps the balance of payments between China and Malaysia in terms of annual export statistics, and this will further promote bilateral economic and trade ties.”