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Overview

ICBC Financial Leasing participates in $423 million leasing agreement with Vale Shipping Singapore for use of four VLOC ships

Commitments (Constant USD, 2023)$221,270,958
Commitment Year•2015Country of Activity•BrazilDirect Recipient Country of Incorporation•SingaporeSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2015
Start (actual)
Dec 8, 2015
End (actual)
Dec 8, 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

  • Vale Shipping Singapore Pte. Ltd.

Loan desecription

ICBC Financial Leasing participates in $423 million leasing agreement with Vale Shipping Singapore for use of four VLOC ships

Interest type•Unknown

Narrative

Full Description

Project narrative

On December 15, 2014, Vale International SA and ICBC Financial Leasing and Millenia Resources signed a cooperation agreement for the maritime transportation of iron ore. Initially, under the agreement, two VLOC ships with a capacity of 400,000 tons, owned and operated by Vale, would be sold to a consortium of investors led by the ICBC Financial Leasing and Millenia Resources. Then, on December 8, 2015, Vale Shipping Singapore, a subsidiary of Vale International SA (‘Vale’), and VLOC Maritime HK., Ltd., a subsidiary of ICBC Financial Leasing and of Millenia Resources, concluded the purchase and sale transaction for four VLOC ships, which totaled $423 million. The amount was received by Vale, concurrently with the delivery of the ships to the new owners on December 8, 2015. In a filing with the U.S. Securities and Exchange Commission, Vale reported that “we used part of the proceeds to repay debt to the Export-Import Bank of China and the Bank of China Limited that was incurred to finance the construction of the very large ore carriers, reducing the total debt by US$284 million. The loan from Export-Import Bank of China and Bank of China Limited is captured via Record ID#38278.

Staff comments

1. Given that we do not know how much ICBC Financial Leasing and of Millenia Resources contributed, AidData assumes equal contributions of $211,500,000 the time being. This issue warrants further investigation. 2. AidData assumes that the December 8, 2015 agreement was a capital lease agreement. 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.