[21 December 2014 – Hong Kong] China Aircraft Leasing Group Holdings Limited (“CALC” or the “Group”, stock code: 01848.HK) is pleased to announce that on 19 December 2014, each of the Group’s Special Purpose Companies (“SPCs”), all of which are wholly-owned subsidiary of the Group, and the Independent Trust (as trustee of three trust plans respectively) entered into the Finance Lease Receivables (“FLR”) Transaction Documents respectively in relation to the Realisation Transaction (“Realisation Transaction”). The Independent Trust agreed to purchase the FLR of three aircraft at the total consideration of approximately US$103 million (equivalent to approximately HK$803.4 million). This transaction demonstrates not only the Group’s ability in business innovation; but also proves the sustainability and growth potential of its business model. 

Dr. Mike POON, Chief Executive Officer and Executive Director of CALC, said, “The Group’s success in entering into the FLR Transaction Documents with the Independent Trust fully demonstrates its unique advantages in liquidising capital and diversifying financing channels. Throughout years of strategic partnerships with major banks and financial institutions, the Group  continues enjoying benefit from various privileged financing services from different banks and financial institutions, which will further facilitate the development of the Group’s one-stop, full life cycle aircraft solutions business.” 

The aviation services industry is particularly capital intensive, hence the financing capability and cash flow turnover rate are the key factors in determining the success of a business. The Group supports its sustainable growth through long-term bank borrowings, realisation of FLR and various financing channels. The Group sells the long-term FLR to independent third parties; after deducting the transaction costs and taxes, the net proceeds will be recognised as income. The purpose is to realise the FLR in advance to transfer leasing risk, lower financial leverage, enhancing cash flow,

and sustain the business development (e.g. purchase more aircraft to expand its fleet size and repay bank loans). This process accelerates the expansion of business scale and solidifies the foundation for new ventures such as aircraft disassembling services.”