Fantasia Holdings Group Co., Limited (1777) revealed developments regarding a restructuring agreement (the “Restructuring Agreement”) arising from a dispute (the “Dispute”) over indebtedness and security linked to its shares in Colour Life. The Company had entered into financing transactions relating to certain total return swap pass-through instruments, resulting in outstanding debt obligations now referred to as the “Purported Indebtedness.”

The Company was unable to fully discharge these obligations and subsequently reached a series of transaction rearrangements, including an agreement in 2022 that introduced a revised principal amount of USD101.85 million plus accrued interest. However, persistent financial stress prevented repayment. The Dispute centered on whether indebtedness had validly “arisen under” certain account opening documentation and thus whether TFISF, the financing party, was entitled to enforce security over shares of Colour Life.

In August 2025, Fantasia Holdings executed a restructuring support agreement featuring a proposed debt restructuring (the “Proposed Debt Restructuring”). However, TFISF opposed any inclusion of the Purported Indebtedness in that plan. Later attempts to dispose of Colour Life shares (the “Tender”) failed to resolve the Impasse. Negotiations resumed in late 2025, culminating in the Restructuring Agreement dated 2 January 2026, where the parties agreed on a compromise that discharges the Purported Indebtedness under specific conditions.

According to the Restructuring Agreement, outstanding obligations will be reduced to a Net Deficiency Amount, and new debt (the “New Debt”) will be held on a non-recourse basis to Fantasia Holdings and other group members (aside from the pledged entities). The Company retains a portion of Colour Life shares valued at HK$0.087 each, following an independent valuation. Management considered factors such as limited market appetite for large share blocks, potential legal costs related to the Dispute, and ongoing debt restructuring needs.

Fantasia Holdings also announced a delay in dispatching the relevant circular. Additional time is required to finalize details, pushing the estimated dispatch date to on or around 28 February 2026. The Company emphasized that this Restructuring remains subject to conditions and may not proceed if certain requirements are not met. Investors are advised to remain cautious and seek professional guidance when dealing in the Company’s securities.