Leader Education Limited (1449) has published details of a major transaction involving a sale and leaseback arrangement with Haier Financial Services China Co., Ltd. Under this arrangement, Haier acquires certain campus-related assets of Heilongjiang College of Business and Technology for RMB20 million, which are leased back to the college for a total lease payment of approximately RMB21.9781 million over a 36-month term.

The ownership of the underlying assets will transfer to Haier upon completion of the purchase. Upon full settlement of all lease payments, Heilongjiang College of Business and Technology will regain the asset ownership. According to the circular, this is intended to support campus construction and augment working capital.

The effective interest rate for the lease stands at 7.6%. The transaction has been approved by Leader Education’s major shareholders, representing about 74.50% of its issued share capital, hence obviating the need for a general meeting. The deal is recognized under applicable accounting standards as a financing arrangement, with no material gain or loss recorded in the income statement.