- Will the 30 year lease term exhaust the useful life of the underlying assets? If so, it would be considered an installment purchase and the lease payments would be aggregated.
Wednesday, March 02, 2011 4:07 PM
Verne, B. Michael
Our client plans tobuy mining assets for $50 million. At the time of the purchase, buyer will alsoenter into a 30-year lease for real estate on whicl1 quarrying operations arelocated. The lease payments will be approximately $700,000 per year. I amtrying to understand whether the lease payments should be aggregated with thepurchase price for purposes of calculating whether the transaction clears the$66 million size-of-transaction threshold. Any thoughts?