SMIT Holdings Limited (2239) disclosed a major transaction involving the disposal of 16% equity interest in S2C Shanghai. According to the announcement, its subsidiary S2C Holding will sell that stake to a third-party investor for RMB211,665,760. Following the completion, S2C Holding will retain 13.75% equity interest in S2C Shanghai, which will cease to be an associated company of SMIT Holdings.

Based on the announcement, the proposed transaction will generate estimated net proceeds of approximately US$26.6 million after deducting related expenses. SMIT Holdings intends to allocate around half of this sum to research and development, 15% to sales and marketing, and the remaining 35% to general working capital needs. The board stated that the transaction aligns with SMIT Holdings’ objectives to realize investment returns while still benefiting from S2C Shanghai’s long-term growth potential.

As the relevant percentage ratios of the disposal exceed 25% but remain below 75%, the transaction is classified as a major transaction under the Listing Rules. SMIT Holdings has obtained the needed written shareholders’ approvals, and no general meeting will be convened for this disposal. The company’s management indicates that the transaction is expected to strengthen its financial position, and no adjustments are anticipated for the rest of SMIT Holdings’ core operations during the process.