By Lee Seung-yoon and Lee Eun-joo
South Korea’s Woori Bank Co. said on Friday that it has arranged $80 million in finances to Chinese airline services provider CMIG Aviation Co., becoming the first Korean commercial bank to make a foray into China’s aircraft finance market.
According to Woori Bank, it has completed packaging $80 million in finances including its loan of $40 million to charter rental company CMIG Aviation last month to fund its Airbus A330 purchase. State-invested Industrial Bank of Korea offered $39 million in the loan backed by aircrafts.
Woori’s Hong Kong branch will be in charge of overseeing the integrity of the collateral and risk to the loan.
CMIG Aviation, a subsidiary of China Minsheng Investment Group, is engaged in aircraft rental service with a fleet of 16 aircrafts as of February, this year. The Airbus A330 CMIG Aviation purchased this time is a medium- to long-range jet suitable for long-haul operations. The aircraft will be rented out to China’s Sichuan Airlines amid growing demand for long-haul flights in China, guaranteeing stable profit from lease.
An unnamed official from Woori Bank said that it has been working to boost its global investment banking services by opening a counter for investment banking at branches across major global financial markets. Taking the latest loan project in China as an opportunity, the bank plans to expand ownership of high-grade overseas properties in East Asia’s rapidly growing investment banking market by using its global network and differentiated financial services.