CHINA TRAVEL HK (00308) saw its shares drop more than 18% intraday. At the time of writing, the stock was down 15.43% to HK$1.48, with a turnover of HK$55.63 million. The decline follows the stock going ex-dividend on November 18 for its in-kind distribution plan. Under the scheme, shareholders are entitled to one share of a private company (China Travel Wellness & Resort Holdings Limited) for each share held. Alternatively, shareholders opting for cash will receive HK$0.336 per share.

In October, CHINA TRAVEL HK announced an internal restructuring and spin-off of its tourism property business, transferring the assets to the privately held China Travel Wellness & Resort Holdings Limited. The company plans to distribute shares of the private entity to shareholders, effectively separating the business from CHINA TRAVEL HK. Post-distribution, the private company group will no longer be a subsidiary.

Shareholders may receive shares of the private company proportional to their holdings or opt for a cash alternative of HK$0.336 per share, representing approximately 21.96% of the closing price of HK$1.53 on the last trading day before the announcement. The distribution is expected to result in a loss of around HK$160 million in the consolidated income statement.