Huazi Industry to raise RMB35m via sale-leaseback

Baotou Huazi Industry (SSE:600191) announced plans for a sale and leaseback agreement to raise RMB35 million to improve operational efficiency and support its xanthan gum project. The company, along with its subsidiary Shandong Yuwei Biotechnology, will lease back certain production equipment from Guotai Leasing for a 36-month term. At the end of the lease, Huazi Industry has the option to repurchase the assets for a nominal price of RMB1. The funds raised will be used for general working capital. The deal will be secured by a mortgage on the Company's land use rights and the buildings erected thereon. According to the company, this transaction doesn't involve related parties, nor will it have any detrimental effects on the company's operations, financial condition, or operating results.