On 25 April 2023, Greengold Leasing, a subsidiary of the Company, entered into the Finance Lease with the Lessee, to obtain the ownership of the Assets from the Lessee at the consideration of RMB 100,000,000 (equivalent to approximately HKD 113,200,000), which would be leased back to the Lessee for its use and possession for a term of 5 years. Greengold Leasing will be transferred the unencumbered ownership of the Assets from the Lessee on an "as-is" basis at the consideration of RMB100,000,000 (equivalent to approximately HKD 113,200,000) in cash, payable within 12 months from the date of the Finance Lease. The transfer agreement was entered into between Greengold Leasing and the Lessee on the date of the Finance Lease, effecting the terms of the Finance Lease in relation to the transfer of the Assets from the Lessee to Greengold Leasing above. Such consideration amount was determined following arm's length negotiations by the parties to the Finance Lease with reference to the amount of the Assets of approximately RMB 100,385,000 (equivalent to approximately HKD 113,636,000) as valued by an independent valuer as at 14 April 2023, and their state, which were reviewed by Greengold Leasing's experienced leasing team. The consideration amount for the ownership of the Assets will be funded through the internal resources of the Group and/or external banking facilities. Greengold Leasing will lease back the Assets to the Lessee for its use and possession for a term of 5 years commencing from the day the consideration for the Assets transfer has been paid by Greengold Leasing. The total amount of payments for the Finance Lease is approximately RMB 121,269,000 (equivalent to approximately HKD 137,277,000), comprising (a) the lease principal payment of RMB 100,000,000 (equivalent to approximately HKD 113,200,000) and (b) the aggregate lease interest and other fees and expenses under the Incidental Documentation of approximately RMB 21,269,000 (equivalent to approximately HKD 24,077,000). Both the lease principal and interest will be paid quarterly over the lease period. The terms of the Finance Lease, including the lease principal and interest, were determined after arm's length negotiations between the parties to the Finance Lease with reference to the lending and interest rate environment including the prime lending rate published by the National Interbank Funding Center from time to time (for reference purpose, the prevailing prime lending rate was 3.65% as at the date of the Finance Lease), and adjustments taking into account the principal amount of the Finance Lease and availability of funds, the interest risk of financing and servicing costs over the lease period, the credit risks associated and the targeted overall return and risk tolerance of the Group for the Finance Lease on a case by case basis. The Lessee may terminate the Finance Lease provided that all outstanding amounts due thereunder and a compensation equivalent to 20% of the total outstanding lease interest amount as at the time of early termination have been settled. At the end of the lease period or in the event of an early termination of the Finance Lease, subject to the settlement of all outstanding amounts due, the Lessee had agreed to
purchase the Assets at a nominal purchase price of RMB100 (equivalent to HKD 113.2). The Lessee will pay an interest-free deposit of RMB 5,000,000 (equivalent to approximately HKD 5,660,000) to Greengold Leasing on the same day the consideration for the Assets transfer has been paid by Greengold Leasing to secure its payment obligations under the Finance Lease.