AYCL’s rights to operate the new auto lease business of THB 1,500 million. This is the consideration paid from AYCL to GECAL and GE Money Retail Bank Public Company Limited (“GE Money”) for purchase of the right to operate the new auto lease business and for GE Money and GECAL’s non-competition.
Bank of Ayudhya Public Company Limited (“BAY”) has signed the Business Sale Agreement in October 2006 with GECAL and GE Money. In the agreement, GE Money and GECAL agree to sell and BAY agree to purchase all of their right, title and interest in the new auto finance business, mortgage facility business, deposit facility business and property and equipment.
THB 1,500 million is the amount paid by BAY to GE Money and GECAL in consideration of GE Money agreeing to surrender its banking license and GE Money and GECAL giving the followings in relation to the new auto finance business. This agreement has an assignment clause which BAY can assign the right to another company (e.g. AYCL) to operate the auto lease business. After signing the Business Sale agreement, AYCL was incorporated and BAY injected capital into AYCL. AYCL used such capital to pay for the rights to GE Money and GECAL and amortizes this license for a period of 10 years for both accounting and tax purposes.
The license of THB 1,500 million is allocated to GE Money and GECAL at THB 1,100 million and THB 400 million respectively. The license is transferred from AYCL to AYCAL under an entire business transfer process. Impairment review is done at AYCAL after the transfer.