Chinese bank helps BA fund new planes

LONDON: The Industrial and Commercial Bank of China (ICBC) has provided debt financing for the purchase of 36 new planes by British Airways, the Sunday Telegraph here reported.

The bank was one of the lead debt providers on the deal last month, the paper said, which came shortly after ICBC received regulatory approval to set up a financial leasing company.

Analysts said authorities were trying to encourage a revival in the sector in giving ICBC the green light.

The decision came a week before BA placed an order for 12 Airbus A380s and 24 Boeing 747 planes at the end of last month.

"These are the first aircraft that have been bought where Chinese banks have taken a front-line position in the debt structure, outside their domestic market," an unnamed aviation industry source told the paper.

"Chinese banks are recipients of massive amounts of cash. The country has a huge trade surplus. The country and its banks need to find something to do with it."

ICBC, China's biggest lender, came to market on the Hong Kong stock exchange in 2006 in the largest ever initial public offering (IPO) at 22 billion dollars (15.5 billion euros).

At catalogue price, the orders including engines were worth 8.2 billion dollars and BA obtained 1.5 billion dollars' financing for orders up to 2011.