The firm has yet to pay $47.38m for its option agreement.
Raffles Education Corporation’s subsidiary Langfang Tonghui Education Consultancy Co. (Tonghui) has entered a settlement agreement with Langfang He Ying Real Estate Development Co. due to incomplete implementation of an option agreement in relation to a 2013 deal inked to divest some Heibei land and property, an announcement revealed.
Then known as Heibei Oriental Zhuyun Real Estate Development Co., Tonghui inked a deal to sell land-use rights and property to He Ying. He Ying granted Tonghui an irrevocable option which gave it the right to request He Ying to purchase the 70% equity interest held by Tonghui in the registered capital of joint venture (JV) company Langfang He Zhong Real Estate Development Co for approximately $138.5m (RMB700m).
Tonghui exercised this option, noting how the unit has been paid $91.3m (RMB460.83m) out of the exercise price, with a balance of $47.38m (RMB239.17m) still remaining.
Due to the incomplete implementation of the option agreement, both parties have mutually agreed to enter an arrangement wherein He Ying will obtain an adjusted 65.9% whilst Tonghui will hold 34.1% of the JV company’s total equity interest.
Raffles Education’s board noted that shareholder approval does not have to be sought as it believes that the amendments are not material.
Do you know more about this story? Contact us anonymously through this link.