Skyworth (HKG:0751) said its indirect wholly owned unit, Shenzhen Chuangwei Financial Leasing, has agreed to provide financial leasing services worth 85 million yuan to Nanjing Golden Dragon Bus, according to a Thursday Hong Kong bourse filing.

Shares of the firm were up over 1% in Friday morning trade.

The three-year sale-and-leaseback arrangement involves production-related equipment valued at about 100 million yuan. Upon expiry of the term and full repayment, ownership will transfer to the lessee for 1 yuan.

The lease carries a fixed annual interest rate of 5%, or 150 basis points above the five-year loan prime rate, with payments due quarterly, the filing said.

Skyworth said the transaction forms part of its financial leasing operations and will generate stable interest income and cash flow.