SITC International Holdings Company Limited (SITC) has executed two connected transactions on 27 April 2026 involving the container vessel “SITC SUBIC”.

The first transaction is the disposal of 100% equity in SITC Subic Shipping Company Limited (the “Target Company”) to SITC Container Shipping Company Limited for US$12.16 million (HK$94.87 million). The price was agreed with reference to the vessel’s net asset value as at 31 March 2026. Completion occurred immediately, and the Target Company has ceased to be a consolidated subsidiary of SITC.

Concurrently, the Target Company, now a wholly-owned unit of SITC Container Shipping, leased the vessel back to SITC Shipowning Company Limited, a wholly-owned subsidiary of SITC, under a 15-year bareboat charter. The lump-sum charter fee equals the disposal consideration—US$12.16 million, paid in cash on the signing date. The daily charter rate equates to US$2,221.54.

Under HKFRS 16, SITC will recognise a right-of-use asset of US$12.16 million for the charter. Management expects no actual gain or loss from the back-to-back disposal and lease arrangement; proceeds from the sale were used to settle the charter fee.

Strategic rationale centres on regulatory requirements for operating the Mainland China–Taiwan service route, which restricts vessel ownership or operation to PRC- or Taiwan-based shipping companies. By transferring ownership to an affiliate and leasing the vessel back, SITC maintains uninterrupted control of route operations while complying with local rules.

Both the disposal and the lease constitute connected transactions. Each falls below the 5% asset ratio threshold under Hong Kong Listing Rule 14.07, requiring public disclosure but not independent shareholders’ approval.

Audited financials show the Target Company recorded profit after tax of US$0.64 million in 2024 and US$2.66 million in 2025. As at 31 December 2025, total assets were US$12.43 million and net assets US$2.66 million.

The vessel, a 12,322-ton container ship built in 2019, generated lease income of US$2.67 million and US$4.81 million in 2024 and 2025 respectively, with matching profit after tax in both years.

Four executive directors—Mr. Yang Xianxiang, Mr. Xue Mingyuan, Mr. Liu Kecheng and Mr. Lai Zhiyong—abstained from voting on the board resolutions due to indirect interests through their spouses in Qingdao SITC, the parent of the purchaser. All independent non-executive directors concurred that the terms are fair and reasonable and in the interests of shareholders as a whole.