ENM HOLDINGS (00128) has announced that, after considering and reviewing the assessment provided by its financial advisor, the board of directors resolved on June 15, 2026, to adopt the advisor's recommendation. The assessment took into account the company's current financial position, operational status, development capabilities, the scale and funding requirements of the residential redevelopment project, potential implementation timelines, professional opinions from external advisors (including specialist real estate consultants), and regulatory considerations.
The board has decided to proceed with the sale of a plot of land located at No. 10 Hiend Road, Lo Wai, Tsuen Wan, New Territories, via a tender process. This land is identified as Lot No. 360 in Demarcation District No. 454 and its extension. The proposed sale is considered the most credible and feasible path to realizing value for shareholders. Following the completion of this proposed sale, the company's shares will be voluntarily delisted from The Stock Exchange of Hong Kong Limited in accordance with Rule 6.15(2) of the Listing Rules.
The company will evaluate and formulate the detailed terms and structure of the proposed sale, aiming to optimize the disposal value and thereby enhance returns for shareholders. Relevant considerations to support this objective will include determining the optimal timing for the sale, which must account for the government's statutory road gazettal process.
As noted in the company's 2024 annual report, after receiving the government's provisional basic terms of offer through a land exchange application process in July 2024, the company initiated the required statutory road gazettal procedure for the proposed road works, which form part of the land exchange terms and conditions. As of the date of this announcement, the road gazettal process is still ongoing. Completion of the road gazettal is a prerequisite for the government to assess the land premium and issue formal basic terms of offer, including the premium amount.
The road gazettal is a statutory, multi-stage procedure involving established steps, public consultation, and regulatory review, and its required duration may be extended. The current road gazettal application was submitted to the Lands Department in November 2024. Based on the company's currently available information and the government's indicative timeline, the road gazettal is expected to be completed around April 2027.
According to advice from the financial advisor and opinions obtained from professional real estate consultants to date, if the proposed sale is completed before the road gazettal is finalized, there remains uncertainty as to whether the existing road gazettal process can continue after a change in ownership of the land, should a new owner submit a fresh land exchange application. Potential bidders may be deterred by the potential need to restart the road gazettal process and the corresponding impact on the development timeline for the land. These uncertainties are less attractive from a buyer's perspective and could adversely affect bidding interest, the level of competition in the tender, and the final transaction price.
Therefore, to optimize bidder participation, enhance tender competitiveness, and maximize overall shareholder returns, the company currently intends to commence the tender process in the first quarter of 2027. This timing is intended to align with the anticipated completion of the road gazettal procedure, with an indicative target to complete the proposed sale in the third quarter of 2027. The specific timing will depend on market conditions and regulatory processes, including any changes to the road gazettal schedule.
The board currently believes this arrangement should reduce a significant source of uncertainty for buyers while avoiding potential additional delays and execution complexities that could arise if the company waited for the government to issue formal basic terms of offer, including the land premium amount.
According to the company's annual report for the year ended December 31, 2025, the carrying amount of the land was HK$320 million, which represents its fair value as of that date. This carrying amount should not be regarded as the current market value of the land, the minimum reserve price for the forthcoming tender, or the consideration for the proposed sale. The actual consideration for the proposed sale will depend on the outcome of the tender process, which in turn may be influenced by various factors including prevailing market conditions, bidder participation and intentions, land premium assumptions, and other relevant factors.
The company currently intends to select a winning bidder (the buyer) through the tender process and will only seek shareholder approval after entering into a formal agreement concerning the proposed sale. This formal agreement will contain conditions, including a condition regarding obtaining shareholder approval. After selecting a buyer, the company will issue an announcement in accordance with Rule 3.5 of the Takeovers Code, stating a firm intention to make an offer. The company is under no obligation to accept any bid.
The board will consider the tender results, the terms proposed by relevant bidders, prevailing market conditions, professional advice, and the overall interests of the company and its shareholders before submitting the proposed sale for shareholder approval. Consequently, the proposed sale and the proposed delisting will only be presented for shareholder approval when the company enters into a legally binding agreement for the sale, which will set out the consideration and principal terms. These terms, together with further information regarding the proposed transactions, will be disclosed by the company in due course via an announcement and/or a circular.
Where applicable, any shareholder deemed to have an interest in the relevant resolutions under the Takeovers Code and/or the Listing Rules will be required to abstain from voting. If the required shareholder approval is not obtained, the proposed sale, proposed delisting, and related proposed transactions will not proceed on the proposed terms. In such a case, the company will carefully consider other feasible alternatives, taking into account the circumstances at that time and the overall interests of the company and its shareholders.
Following the completion of the proposed sale and prior to the proposed delisting, the company intends to return value to shareholders via a dividend distribution. The amount will comprise the net proceeds from the proposed sale, certain cash reserves of the company (subject to compliance with the Companies Ordinance), and the net proceeds that may be generated from the potential sale and/or redemption of the company's financial assets. The final amount will be determined after considering the company's obligations to pay related fees and expenses and to maintain a sufficient level of working capital while complying with all applicable statutory and regulatory requirements.
To facilitate the proposed distribution, the company also intends to build up sufficient distributable reserves through: (i) implementing a court-free reduction of capital under the Companies Ordinance; and (ii) applying to the High Court of the Hong Kong Special Administrative Region to release a commitment to maintain a special reserve of approximately HK$808.8 million, which arose from a capital reduction undertaken by the company in 2002 to reduce the par value of its shares.
As the amount of the proposed distribution will depend on, among other things, the final net proceeds from the proposed sale, the realization value from the proposed sale of financial assets, applicable costs, expenses, liabilities, working capital requirements, and the completion of the proposed capital reduction and court application, the company is not in a position at this stage to provide any indicative figure for the distribution per share. Further information will be provided to shareholders after a buyer is selected and the principal terms of the proposed sale and the proposed transactions are established.
As the land in question is a major asset of the company and, following the completion of the proposed sale, the company is not expected to retain any substantial operating business, the board currently anticipates that the proposed distribution, proposed delisting, and a proposed voluntary winding-up of the company will provide an orderly mechanism to return value to shareholders and conclude the company's business. After the proposed distribution is paid and following the proposed delisting, the board will, subject to obtaining the requisite shareholder approval, appoint a voluntary liquidator under the Companies Ordinance to carry out the proposed winding-up.
In considering the proposed transactions, the board has also taken into account the group's current business and asset status, and the need to adopt a credible and orderly value realization pathway in accordance with applicable Listing Rules and regulatory requirements. The structure of the proposed transactions outlined in this announcement is preliminary in nature and remains subject to further optimization and refinement. The company will continue to consult with its professional advisors and relevant regulatory bodies to refine the structure and implementation method of the proposed transactions.
Shareholders and potential investors are advised to note that the proposed transactions are subject to the fulfillment of various conditions and may or may not proceed.