| ICBC introduces new newbuilding funding method |
| The Industrial and Commercial Bank of China (ICBC) has introduced a new financial instrument to help finance newbuildings that can be bareboat chartered to shipping companies, with the financing coming from private investors. The new method has been applied in a deal between a Chinese state-owned shipbuilder and an overseas bareboat charterer, Xu Li, vice-president of ICBC's Shanghai Branch, told the Asia Shipping Fortune Forum 2015 on 21 May. The term of the financing is set at 12 years, according to ICBC. ICBC has set up a private equity fund and encourages private investors to finance newbuildings through ICBC Asia Investment Management, a subsidiary in Hong Kong, taking the newbuilding financing debts off ICBC's balance sheet, Xu said. The private equity will then acquire the entire stake in a special purpose vehicle that owns the newbuilding. The advantage of this method is that ICBC can provide 100% financing for newbuildings, instead of only 90% in conventional methods, Xu added. |