Raffles Education unit amends $138.5m deal with China-based developer

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.