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Overview

ICBC Leasing leases five Boeing 747-8 freighter aircraft to Asiana Airlines

Commitment Year•2015Country of Activity•KoreaDirect Recipient Country of Incorporation•KoreaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Feb 25, 2015

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned companies

  • ICBC Financial Leasing Co., Ltd. (ICBCFL) (ICBC Leasing)

Receiving agencies

Private Sector

  • Asiana Airlines, Inc.

Loan description

ICBC Leasing leases five Boeing 747-8 freighter aircraft to Asiana Airlines

Interest type•Unknown

Narrative

Full Description

Project narrative

By February 25, 2015, ICBC Financial Leasing Co., Ltd. (ICBCFL; ICBC Leasing) — a Chinese state-owned leasing company and wholly-owned subsidiary of the Industrial and Commercial Bank of China (ICBC) — had entered into a lease agreement with Asiana Airlines, Inc. — a South Korea-incorporated airline headquartered in Seoul and listed on the Korea Exchange with KUMHO Industrial Co., Ltd. as its largest shareholder (30.08% stake at the time of the lease) — for five Boeing 747-8 freighter aircraft. The aircraft was originally intended for Atlas Air in an order that was not taken up. Media reports about ICBC Leasing ordering 747-8s for Asiana first appeared in June 2014, stating the list value of the aircraft could be as much as $1.8 billion USD. More talk of the alleged leasing appeared in the media in November 2014. Asiana reportedly expecting to take delivery of the first one circa February 25, 2015.

Staff comments

1. A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. The lessor is the legal owner of the asset, while the lessee obtains the right to use the asset in return for regular rental payments. Under a capital lease (a financial arrangement where the lessee/borrower uses an asset and pays regular installments plus interest to the lender/lessor), rental payments are usually classified as interest and obligation payments, similarly to a mortgage (with the interest calculated each rental period on the outstanding obligation balance). AidData codes capital leases as loans.