Kunming Dianchi Water Treatment Co., Ltd. (DCWT) has entered into a finance-lease agreement with CCB Financial Leasing Corporation Limited, enabling the water-services provider to unlock up to RMB63.50 million via a sale-and-leaseback of selected sewage-treatment equipment and facilities.
The assets, carried on DCWT’s books at approximately RMB116.70 million as of 31 March 2026, will first be transferred to CCB Financial Leasing and immediately leased back to DCWT for five years. The lump-sum or staged transfer price—capped at RMB63.50 million—will be paid no later than 16 March 2027, subject to customary conditions precedent, including board approvals and completion of a full joint-and-several guarantee from Kunming Water Group Co., Ltd.
Lease payments will be made semi-annually in 10 instalments, with no principal repayment in the first two periods, 10% each in the third and fourth, 13.34% each in the fifth to ninth, and the balance in the final instalment. Interest is pegged to the five-year-plus Loan Prime Rate (LPR), currently 3.50%. The rate is reset annually and floored at 0.50%. Late payments incur a daily penalty rate of 0.05%. No handling fee or deposit is required.
Collateral measures include (1) the aforementioned corporate guarantee from Kunming Water Group and (2) a pledge over all equity in DCWT’s wholly owned subsidiary, Liuyang Dianchi Water Treatment Co., Ltd. Ownership of the leased assets will revert to DCWT automatically at lease expiry, provided all obligations are met. Early repayment is permitted with 90 days’ notice, subject to settled arrears and specified fees.
The transaction qualifies as a discloseable transaction under Chapter 14 of the Hong Kong Listing Rules, as the relevant percentage ratios exceed 5% but are below 25%, triggering announcement and reporting requirements.
Management stated that the proceeds—about RMB63.50 million—will support daily operations and debt repayment, aligning with DCWT’s ordinary course of business. CCB Financial Leasing is wholly owned by China Construction Bank Corporation and is independent of DCWT and its connected persons.