ICBC Leasing enters into $869 million USD sale and leaseback agreement with BP Shipping for acquisition of 18 oil tankers

Project narrative

On October 21, 2015, during the state visit of Chinese President Xi Jinping to the United Kingdom, ICBC Financial Leasing Co., Ltd. (ICBCFL) (ICBC Leasing) signed a $869 million USD (~£550 million GBP) sale and leaseback agreement for 18 oil tankers with BP Shipping Limited, the wholly owned maritime arm of British oil and gas supermajor BP P.L.C. The leasing arrangement was for a period of 10 years, and BP Shipping agreed to pay rent during that time period. BP International provided a guarantee to the ICBCFL-designated special purpose vehicle (SPV). The 18 vessels included in this sale and leaseback agreement were ordered from shipyards in South Korea by BP. The deal was hailed as one of the ‘flagship projects’ of Xi's visit to the UK. This was the first instance of cooperation between ICBC Leasing and BP and was reportedly the largest single financing project in BP Shipping's century-long history. In November 2019, BP Shipping and ICBC Leasing entered into a deal with Denmark's Maersk Tankers concerning 11 vessels acquired with deal. Maersk Tankers would add the 11 vessels owned by CBC Leasing to its fleet on a bareboat charter arrangement and then hire them out to BP Shipping on a three-year time charter; Maersk Tankers would be responsible for operational risk and technical management. The 11 vessels were all built between 2016 and 2017; three were 158,000 deadweight tonnage (DWT) Suezmax ships (British Tradition, British Heritage, and British Century) constructed by STX Corporation in 2017, and three MRs and five handysizes constructed Hyundai Mipo Dockyard. The first delivery to Maersk was planned for early 2020 and expected to conclude by the end of that year.