China's Huatai Insurance Group has signed a deal to provide Comac with CNY15 billion ($2.25 billion) in funds to support its research and development of the C919 narrowbody programme.
The deal will be structured using a 10-year debt instrument, through the Chinese insurer's Huatai Asset Management unit. No other financial details of the transaction were disclosed.
While the agreement is set at 10-years, Comac will be able to request for an extension thereafter, depending on its production and operational needs, says the airframer in a statement. This is the first time it has secured such a deal with an insurer.
It adds that the potential of the C919 programme is reflected in its orders, and that profitability will increase once the programme goes into mass production.
Comac is targeting to certificate the 168-seat C919 have it enter into service in 2020-2021. The manufacturer has so far secured commitments for 600 of the type, albeit mostly from Chinese airlines and leasing companies.