LEASEBACK
An agreement where the asset seller will lease back the same asset from the buyer after selling the property. In this arrangement, the seller becomes the lessee and the buyer is now the lessor. The amount to be paid and the tenure of the agreement are specified in the contract. This becomes useful when the buyer has to make full use of the asset in order to operate but firms have to untie the invested capital in the asset. Sometimes, it provides tax benefits such as tax deductions.
Also known as sale and leaseback.
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