China HK Power Smart Energy Group Limited has signed a conditional loan-capitalisation agreement with its chairman and controlling shareholder, Dr. Kan Che Kin, Billy Albert. The company will issue 722.22 million new shares at HK$0.36 each to set off HK$260.00 million of unsecured shareholder loans that currently bear 5% annual interest and are repayable on demand.

Upon completion, Dr. Kan’s direct and deemed stake will rise from 50.59% to 54.96%, while the public float will be diluted from 49.40% to 45.03%. The new shares represent 9.71% of the existing share capital and 8.85% of the enlarged share base.

The capitalisation price matches the closing price on 5 March 2026, the day the agreement was signed, and carries a 0.27% discount to the five-day average price. It stands 753.08% above the unaudited net asset value per share of HK$0.0422 as at 30 September 2025.

Management highlights that the transaction will immediately reduce interest-bearing debt by HK$260.00 million, lowering the group’s gearing ratio from 251.78% at the latest practicable date to an estimated 81.15% post-completion, while preserving cash (HK$17.53 million as at the latest practicable date) for working-capital and business-development needs.

Completion is subject to independent shareholders’ approval at an extraordinary general meeting on 14 May 2026 and the Stock Exchange’s listing approval for the new shares. If conditions are unmet by the long-stop date—three months after signing—the agreement will lapse.

Professional fees related to the capitalisation are expected to total approximately HK$0.20 million, payable by the company in cash.