China Eximbank provides $101.4 million USD overseas investment loan to Xi'an Aircraft Industry for its acquisition of a 91.95% equity stake in FACC

Project narrative

In September 2009, Xi'an Aircraft Industry (Group) Co., Ltd. (XAC), a Chinese state-owned aircraft manufacturer and developer and subsidiary of Aviation Industry Corporation of China (AVIC) whose clients include the People's Liberation Army Air Force and the People's Liberation Army Naval Air Force, signed an acquisition agreement with the shareholders of Fischer Advanced Composite Components Co., Ltd. (FACC) — a Ried im Innkreis, Austria-based aerospace and aircraft parts manufacturing company — to acquire a 91.95% equity stake in FACC for a consideration of about €100 million EUR ($144 million USD). Hong Kong-based private equity firm Advanced Treasure Limited involved itself, taking a 9.125% stake of the 91.25% from XAC as part of the acquisition. To finance the acquisition, on or just prior to November 29, 2009, the Export-Import Bank of China issued a $101.4 million USD overseas investment loan to XAC; the loan application was reviewed, approved, and issued in fewer than three weeks. FACC was especially known for its manufacture of composite material used in aircraft (i.e. wings, fuselage, dome, windows, seats, interior furnishings, etc.), including aerospace structural components and aviation interior products. Its clients include Airbus, Boeing, Bombardier, Alenia Aeronautica, and Eurocopter. The acquisition was expected to be important of the development of the aircraft manufacturing industry of China and specifically the development of large aircraft. XAC planned to use FACC to research and develop supporting technologies (namely the cabin, mid-fuselage, outer wing box, ailerons, trailing edge flaps, leading edge slats, and spoilers) for the Comac C919 aircraft, the first large passenger aircraft independently developed by China. In 2009, FACC had sales of €272 million EUR ($391.5 million USD) and employed about 1,600 employees. The acquisition of FACC was seen as strategic. Its technology, allowing aircraft to be designed to be lighter, was a significant advantage for XAC and AVIC to acquire to improve their knowledge and production. Its role as a supplier of Western aerospace companies like Airbus and Boeing gave XAC and AVIC access to that supply chain. Austrian holding company ACC Kooperationen und Beteiligungen GmbH (5%) and Stephan Ges.m.b.h. (3.75%) together retained a 8.75% stake in FACC. XAC and FACC stated their commitment to maintaining operations in Austria. XAC planned to inject at least €40 million EUR ($58 million USD) of equity into FACC after completion. This was the largest acquisition by a Chinese company in Central Europe and the first time a European aerospace manufacturing company had been acquired by an Asian one. The acquisition, subject to regulatory approval, and was expected to close by the end of 2009. The acquisition was completed on December 3, 2009. On June 27, 2014, XAC listed FACC on the Vienna Stock Exchange, albeit retaining majority control.