ICBC provides a loan to Phoenix Tree HSC Investment for the acquisition of a 100% stake in Steyr Motors GmbH

Project narrative

In 2012, the Industrial and Commercial Bank of China (ICBC) issued a loan to Phoenix Tree HSC Investment (Wuhan) Co. Ltd. (PTC) — a Hong Kong-based investment company — to support its acquisition of a 100% stake in Austrian engine manufacturer Steyr Motors GmbH for approximately RMB 284 million. Steyr Motors GmbH was an Austria-incorporated manufacturer of diesel engines based in Steyr, Upper-Austria. It developed a parallel hybrid propulsion system in 2008 and serial hybrid propulsion system in 2010. Steyr made engines for light armored vehicles, all-terrain vehicles, hybrid trolley buses, and pleasure and work boats as well as auxiliary power units (APUs) for main battle tanks including the Leopard 2. Its customers included numerous actors in the defense space, including BAE Land Systems, AM General, GAZ, and Panhard. Steyr's engines were most famously used (via a partial license) in AM General's High Mobility Multipurpose Wheeled Vehicle (HMMWV) (Humvee) and UROVESA's URO VAMTAC. On September 27, 2012, Phoenix Tree HSC Investment (Wuhan) Co. Ltd entered into an agreement with Steyr Motors GmbH in which Phoenix would acquire 100% of the shares in Steyr Motors and its subsidiaries Steyr Motors Liegenschaften GmbH and Steyr Motors North America, Inc.. The acquisition was made on the condition that Steyr's existing facilities in Austria would remain the worldwide production hub for the construction of customized high-power engine engines designed for the European and North American markets and that all management would continue, to protect the experience and knowledge base of Steyr's engineers in Austria, for at least five years. Phoenix Tree expected to combine European innovation, research and development competencies, and access to Western markets with Chinese advantages in its market potential and low production costs. Steyr's engines were well regarded, but only able to be produced its engine range in small series, which the partnership was to address via Chinese production sites for volume production. Phoenix Tree planned to expand opportunities in the Chinese marine segment in which Steyr was already active. The production sites in Steyr, Austria were to be expanded with a focus on the development of new diesel engines for applications including the marine industry and further jobs in engine and injection development, project management, and strategic purchasing. The acquisition was completed in 2012. By 2014, Steyr Motors was reportedly well established in China with a factory in Shanghai and had a stock exchange listing on the Shanghai Stock Exchange. In 2018, Steyr Motors was experiencing liquidity problems (which outside analysts tributed to a broad product portfolio that suffered from the limited success of hybrid engines) that led for it to file an application for restructuring proceedings. In May 2018, the chief executive officer of Steyr unexpectedly left his office. Then, in 2019, Phoenix Tree sold Steyr to French defense contractor Thales Group.