Luxembourg, Cargolux and Bank of China sign finance MoU

14 / 09 / 2018

Luxembourg’s finance ministry, freighter operator Cargolux and Bank of China have signed a Memorandum of Understanding for a $155m global credit line, with a first phase of around $45m implemented immediately.

The agreement, signed in Beijing, foresees “several realms for cooperation in order to strengthen bilateral ties which include mid-term credit facilities, bonds (Schuldschein), financial market products and aircraft financings”.

Zhou Lihong, chairman of Bank of China Luxembourg, said: "We are happy to strengthen our cooperation with Cargolux through this strategic partnership which is a significant step in our support for the ‘Silk Road in the air’.”

The Luxembourg-based all-cargo carrier, operating 14 Boeing 747-8 and 14 Boeing 747-400 freighters, has been 35% owned by China's Henan Civil Aviation Development (HNCA) since 2014.

Shengbo Yuan, deputy general manager of HNCA and a Cargolux board member, said of the financial agreement: “There is a long standing and trustworthy relationship between Cargolux and the Chinese institutions, one that we are happy to keep building on. Agreements such as this one reflect our mutual understanding and plant the seed for many more successful endeavours.”

Cargolux has ambitions to launch a joint venture Chinese airline local partners, although Carolux chief executive Richard Forson confirmed in May this year that the launch had been delayed beyond the proposed 2018 start date as the process of gaining permissions was taking longer than initially expected.

This strategic partnership, containing several phases of implementation, was signed during the Luxembourg for Finance mission to China in a ceremony attended by top banking and government officials from both countries.

Cargolux was represented by the airline’s chief finance officer, Maxim Straus who signed the deal with Chen Longjian, deputy general manager, Bank of China Luxembourg.

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