China Everbright Limited explores opportunities arising from the rapid growth of aviation and commercial aviation financing, investment and leasing activities via its subsidiary China Everbright Aerospace Holdings Limited (CEAL). In 2011, CEAL acquired 48% shareholding of China Aircraft Leasing Group Holdings Limited (CALG). Leveraging China Everbright Limited's financial strength and profound experience in the financial sector in China and Hong Kong, it is expected that CEAL will further expand the financial leasing business of China Everbright Limited, solidifying its aviation business and related investment fund. To further enhance its capital strength, CALG brought in Hang Tian Investment Holdings Limited, part of China Aerospace Science and Technology Corporation, as a strategic investor holding an approximate 8% interest in 2012. Accordingly, China Everbright Limited's holding in CALG decreased to approximately 44%. In July 2014, CALG was listed on the Main Board of the Hong Kong Stock Exchange (stock code: 01848.HK). After listing, CEAL holds approximately 35% stake of CALG, is still the single largest shareholder of CALG.
Introduction of China Aircraft Leasing Group Holdings Limited
China Aircraft Leasing Group Holdings Limited (“CALC”) is the first full value-chain aircraft solutions provider in Asia. In addition to aircraft operating lease, financial lease and sale and leaseback, CALC provides customers with aircraft full-life solutions, covering fleet planning consultation, structured financing, fleet replacement package deal, third party aircraft resale as well as aircraft disassembly and part-out business. With its professional team possessing extensive international aviation market experience and its globalised sources of financing, the Group is currently the largest independent aircraft operating lessor in China, in terms of the total number of aircraft under ownership and new aircraft order book, and has successfully expanded to Asia Pacific, European, and American market.
Listed on the main board of the Stock Exchange of Hong Kong on 11 July 2014, CALC is the first aircraft lessor listed in Asia. CALC is currently a constituent stock of the Hang Seng Global Composite Index, the Hang Seng Composite Index, MSCI China Small Cap index, and an eligible stock under southbound trading of Shenzhen-Hong Kong Stock Connect. CALC was named “Aircraft Lessor of the Year” 2015 and 2016 by Global Transport Finance, for its expertise in delivering outstanding services and providing effective financing solutions to a diverse range of customers.
Aircraft Operating Lease
CALC purchases aircraft from manufacturers and lease the aircraft to airlines with aircraft title belongs to the lessor.
This structure allows more flexibility in reconstructing the fleet and reduces the initial acquisition costs for the airline. Additionally, aircraft asset is off balance sheet which allows a lower debt-to-asset ratio.
Sale and Lease back
CALC purchases aircraft from airlines then leases them back to the airlines. It helps airlines to lower the leverage ratio and optimize the fleet financing structure.
Disposal of finance lease receivables for aircraft
Through disposal of finance lease receivables, CALC sells the remaining rental receivables to investors, but retains the ownership of the aircraft. CALC reduces substantial market risks on future lease receivables. This will also lower its concentration risk on the related airlines in the short term while allowing CALC to have more capacity to enter into new leases with such airlines in the long run, creating more business opportunities.
CALC provides aircraft retirement strategies for Chinese airlines through various remarketing solutions, such as parts-out or lease-out.