Leasing firm seeks to double portfolio

ICBC Financial Leasing is targeting foreign shipowners with leasing deals as it seeks to double the value of its ship asset portfolio this year, a senior executive has confirmed.

Yang Changkun, managing director of ICBC Financial Leasing's shipping division, told the that "trying to double the value within a year is quite a challenge". Yang said the firm, an arm of the world's largest commercial bank by market value, already controls more than 150 ships that it leases to shipowners.

He was speaking after French offshore company Bourbon signed a US$1.5 billion sale and lease-back deal with ICBC Financial Leasing on Tuesday involving up to 51 ships.

Bourbon said the ships, comprising 24 in operation and 27 under construction, which are to be delivered within 14 months, are worth US$2.5 billion.

Under the deal, ICBC Financial Leasing will buy the ships at market price with a vendor loan of up to US$116 million. The ships will be chartered back to Bourbon for 10 years on a bareboat basis, meaning Bourbon will be responsible for all crewing and operating expenses. Bourbon will have the right of first refusal to buy the ships if ICBC Financial Leasing decides to sell the vessels during the lease period.

Banking sources told the that Bourbon initially started to negotiate the deal with Standard Chartered Bank, which has a ship leasing division, along with other banks in China.

Standard Chartered's ship leasing business includes an operation in Hong Kong, where it owns and leases vessels to operators including commodities outfit Noble and Wah Kwong Maritime Transport. Nigel Anton, Standard Chartered's global head of shipping, moved from London to Hong Kong about a week ago to help develop the bank's shipping operation.