ICBC Leasing, a wholly-owned subsidiary of ICBC, has recently struck a RMB 300 million leaseback deal with a large domestic automobile manufacturer to help it adopt new technique, new process and new equipment to speed up transformation and upgrade.

With in-depth transformation and upgrade of industrial structure in China over the past years, businesses showed strong interest in purchasing new equipment for technical transformation and production expansion. Therefore, by leveraging its strong service network and its subsidiary-ICBC Leasing, ICBC has promoted finance lease products related to large equipment to support technical transformation of core equipment and development of home-made equipment. So far ICBC has rendered leasing services for more than 380 enterprises and over 40,000 production equipment units, with total funding of more than RMB 170 billion.

For example, the aforementioned large automobile manufacturer had huge short-term debts in recent years, which restrained its growth. To rehabilitate existing assets with leasing products and provide the company with long and medium-term financing, ICBC Leasing offered leaseback service using automobile part pressing, welding and testing and other high-end manufacturing equipment imported by the company as the leased articles. To support the leasing business, ICBC also looked for low-cost funds from various channels, and utilized cheaper funds to cut costs for the company.

Equipment leasing means a leasing company purchases new equipment from a supplier or directly from a company at its request, and then leases the equipment to the company under the contract, so as to finance the company’s purchase of advanced equipment for technical transformation. ICBC Leasing has supported a large number of Chinese manufacturing enterprises, including new energy, rail transportation and textile machinery manufacturers, through direct lease, leaseback and vendor lease.