ICBC pledges to lease Airbus aircraft worth $1.7 billion to PT Garuda Indonesia (Persero) Tbk

On October 3, 2013, PT Garuda Indonesia (Persero) Tbk -- an Indonesian state-owned enterprise -- and the Industrial and Commercial Bank of China (ICBC) signed a cooperation agreement valued at $1.7 billion for PT Garuda Indonesia (Persero) Tbk’s sale and leaseback of five Boeing 777-300ER aircraft and an “operating lease” plan for ICBC Financial Leasing’s six Airbus 320-200 aircraft for Citilink. PT Garuda Indonesia (Persero) Tbk originally expected to receive the five Boeing 777-300ER aircraft between May 2014 and September 2015, while the six Airbus 320-200 aircraft were expected join the Citilink fleet between June 2014 and December 2014. The A320 planes contracted were to be produced by Airbus general assembly plant in Tianjin. The lessor was expected be the Skyhigh XXXI Leasing Company Limited, a wholly owned entity of ICBC Leasing. The final maturity date was 2026. One of the Airbus 320-200 aircraft was received in May 2019.

Additional details

1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 2. The Government of Indonesia holds a 60.54% equity stake in PT Garuda Indonesia (Persero) Tbk. 3. More detailed information on the ICBC borrowings of PT Garuda Indonesia (Persero) Tbk can be accessed via https://www.garuda-indonesia.com/content/dam/garuda/files/pdf/investor-relations/corporate-action/MegaHawk%20-%20Offering%20Circular%20dated%2027%20May%202015.pdf and https://www.garuda-indonesia.com/content/dam/garuda/files/pdf/investor-relations/financial-report/Garuda_Indonesia_Mar18_Eng_-_Final.pdf and https://www.garuda-indonesia.com/content/dam/garuda/files/pdf/investor-relations/corporate-action/Prospektus%20Right%20Issue%20En.pdf

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