SFK Construction Holdings Limited (SFK) has agreed to sell 51% of its wholly owned subsidiary, Bestwise Envirotech Limited, to Guangdong Water Holdings Limited for HK$44.39 million, subject to post-completion adjustments.
The disposal qualifies as a “major transaction” under Hong Kong Listing Rule 14.06 and falls within the 25%–75% asset ratio threshold. SFK has secured written approval from controlling shareholder Sun Fook Kong Group Limited (75% stake), eliminating the need for a shareholder meeting. A circular detailing the deal will be dispatched within 15 business days.
Transaction structure • Sale shares: 19.38 million shares, representing 51% of Bestwise’s issued capital. • Payment terms: – First instalment: HK$18.00 million (40.55%) within five days of share-transfer stamping and execution of a share charge over SFK’s retained 49% holding. – Second instalment: HK$12.00 million (27.03%) within 10 days of completion of an interim audit for 1 January – Completion Date and satisfaction of specified post-closing conditions. – Remaining consideration: HK$14.39 million (32.42%) paid proportionally over a three-year “Performance Guarantee Period” tied to recovery of benchmarked receivables. Any unrecovered receivables at the end of that period must be reimbursed by SFK before the balance is settled.
Key conditions precedent include shareholder and regulatory approvals, a capital reduction of Bestwise to HK$38.00 million, settlement of related-party balances to nil, provision of at least HK$20.00 million interest-free shareholder loan, and maintenance of a HK$43.57 million banking facility.
Put option protection During the three-year guarantee period, Guangdong Water may compel SFK to repurchase the stake if Bestwise: 1) loses requisite public-works licences; 2) fails to achieve an accumulated pre-tax profit of HK$22.39 million; 3) suffers material breaches by the vendor; or 4) encounters six-month shareholder deadlock caused by the vendor.
Financial impact on SFK • Estimated net gain: HK$30.19 million, subject to audit and final consideration adjustments. • Net proceeds: approximately HK$44.39 million, earmarked as general working capital. • Post-completion ownership: SFK retains 49% of Bestwise; the entity will be de-consolidated from group accounts.
Target Company snapshot Bestwise specialises in potable-water and wastewater engineering and is listed on the Hong Kong Government’s approved contractor roster for water-treatment projects. Unaudited results: • FY 2024 profit after tax: HK$10.40 million. • FY 2025 profit after tax: HK$11.26 million. • Net asset value (31 Dec 2025): HK$25.08 million.
Strategic rationale Management views the transaction as an opportunity to crystallise investment gains, redeploy capital into higher-return projects, and leverage Guangdong Water’s state-owned background to expand Bestwise’s reach in Greater Bay Area water projects, while maintaining a minority interest for future upside.