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Overview

ICBC Leasing participates in $700 million leasing agreement to support Wizz Air Group's acquisition of eight Airbus A320 aircraft

Commitments (Constant USD, 2023)$723,779,904
Commitment Year•2013Country of Activity•HungaryDirect Recipient Country of Incorporation•JerseySector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Apr 18, 2013
Start (planned)
Apr 22, 2013
Start (actual)
Apr 22, 2013
End (planned)
Dec 31, 2014
Last repayment (originally scheduled)
Apr 15, 2025

Geospatial footprint

Map overview

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The project established the lease of eight Airbus A320 aircraft by Wizz Air, which is headquartered at the Laurus Offices, Kőér street 2/A, Building B, 1103, Budapest, Hungary. More detailed locational information can be found at: https://www.openstreetmap.org/way/325119606, https://www.openstreetmap.org/way/325119604, https://www.openstreetmap.org/way/325119601

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

  • Wizz Air

Loan description

ICBC Leasing participates in $700 million leasing agreement to support Wizz Air Group's acquisition of eight Airbus A320 aircraft

Interest type•UnknownMaturity•12 years

Narrative

Full Description

Project narrative

ICBC Financial Leasing Co Ltd and Wizz Air, which bills itself as the largest low-cost, low-fare airline in central-eastern Europe, announced on April 18, 2013 that they had entered into a pre-delivery payment financing, sale and 12-year leaseback agreement for eight new Airbus A320 aircraft, marking the start of cooperation between China and Hungary in the aircraft leasing sector. The list value of the deal was $700 million and the aircraft were due to be delivered in 2013 and 2014, with the first three A320s to be delivered the week after the signing of the agreement, according to Jozsef Varadi, chief executive officer of Wizz Air. The budget carrier declined to specify how the new aircraft would be deployed, except to say it would be expanding its routes from 250 in 2012 to 300 in 2013, and with more routes and bases to be added. Cong Lin, Chief Executive, said that the deal was a first for the company and hinted at more to come in Central-Eastern Europe, stating: ‘ICBC Leasing looks forward to expanding in this promising region and working closely with Wizz Air.’ Known deliveries include: Three planes were likely delivered in April 2013. One plane was likely delivered in June 2013. One plane was delivered on June 10, 2014. One plane was delivered on July 22, 2014.

Staff comments

1. ICBC Financial Leasing is a subsidiary of Chinese state-owned ICBC. 2. ICBC Leasing is one of the biggest leasing companies in China. It was established in 2007 as a wholly owned subsidiary of ICBC serving as the leasing arm of ICBC with 94 owned and managed aircraft in its portfolio. ICBC Leasing is headquartered in Tianjin, with offices in Beijing and Dublin. 3. Wizz Air is the largest budget airline in Central and Eastern Europe, operating a fleet of 40 Airbus A320 aircraft from 16 bases with more than 270 routes connecting 93 destinations across 32 countries. 4. AidData assumes that the April 18, 2013 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.