Bank of China’s Luxembourg arm opens up global credit line for Cargolux

Sep 12, 2018: All cargo carrier Cargolux and Bank of China have signed a Memorandum of Understanding for a USD 155 million Global Credit Line to collaborate in various banking projects and reap mutually beneficial opportunities.

The deal was signed in the presence of Pierre Gramegna, Minister of Finance Luxembourg.

The agreement 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.

The strategic partnership contains several phases of implementation, with a first phase of about USD 45 million immediately implemented with the signature of several agreements.

“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 endeavors,” states, Shengbo Yuan, deputy general manager of HNCA and member of the Board of Directors of Cargolux.

“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’,” states Zhou Lihong, chairman of Bank of China Luxembourg.

This strategic partnership was signed in Beijing during the Luxembourg for Finance mission and the ceremony was attended by Marc Huebsch, Luxembourg’s ambassador in China; Nicolas Mackel, CEO Luxembourg for Finance; ZHOU Lihong, chairman of Bank of China Luxembourg; Mingchao Zhang, chairman of Henan Civil Aviation Development and Investment (HNCA), Shengbo Yuan, Deputy general manager of HNCA and several other representatives of the Luxembourg Ministry of Finance and Ministry of Foreign Affairs.

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

Luxembourg-based carrier Cargolux and China institutions share a long-standing relationship. Notably, in 2014, HNCA purchased a 35 percent stake in Cargolux Airlines International.

And then partnership moved further in June 2017 with HNCA and Cargolux announcing that they would become partners to launch a new JV cargo airline based in Zhengzhou. The launch of the cargo airline now called as Henan Cargo Airlines (formerly called as Cargolux China) has been delayed until quarter 3 of 2019. Cargolux holds only a 25 percent share in the airline.