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Raffles Education unit enters settlement agreement for 700m yuan Hebei deal

A RAFFLES Education subsidiary on Tuesday entered a settlement agreement for a 2013 deal to divest some Hebei land and property due to "incomplete implementation" of an option agreement.

In late-2013, Raffles Education's unit, Langfang Tonghui Education Consultancy (Tonghui), then known as Hebei Oriental Zhuyun Property Development, struck a deal to sell land-use rights and property to Langfang He Ying Real Estate Development (He Ying).

This would be done through a 70-30 joint-venture firm and a put option agreement which gave the Raffles Education unit the right to sell its 70 per cent share in the JV to its partner at an exercise price of 700 million yuan (S$138.5 million). The option has been exercised. 

On Tuesday, Raffles Education said its unit has been paid 460.8 million yuan out of the exercise price. The remaining 239.2 million yuan remains unpaid by He Ying.

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The two have now agreed that He Ying will hold 65.9 per cent and Tonghui will hold 34.1 per cent of the JV company's total equity interest respectively.

Raffles Education's board says that shareholder approval does not have to be sought because it believes that the amendments are not material.

Raffles Education closed at S$0.082 on Tuesday before the announcement, down 0.4 cent or 4.65 per cent.