China Travel HK (00308) announced that its board of directors conducts periodic strategic reviews of the group's business operations, adhering to the strategic vision of becoming a "first-class tourism destination investment and operation service provider" while continuously enhancing core competitiveness and overall profitability. To achieve specialized development of the group's core businesses, the board hereby proposes to implement a proposed distribution to shareholders. Upon completion of the proposed distribution, the group's profitability is expected to improve. The group will also further optimize its operating model and allocate more resources to core businesses. The directors believe that the proposed distribution is in the overall interests of the company and its shareholders.
Under the proposed distribution to be implemented for shareholders registered in the company's share register on the record date, the company will internally reorganize its tourism real estate business so that this business will be held by a private company and form a private company group, and the private company group will be spun off from the group through an in-kind distribution of private company shares.
Under the proposed distribution, shareholders may choose: (i) to receive private company shares in proportion to their shareholding in the company on the record date; or (ii) to receive cash in lieu if shareholders (1) choose not to accept and receive private company shares; (2) are unable or not permitted to hold private company shares under applicable laws and regulations; and/or (3) fail to respond to the relevant request to choose, accept and receive private company shares (except for Hong Kong Central Clearing (Nominee) Limited, which may choose to receive cash payment for part or all of its entitlement under the proposed distribution).
Upon completion of the proposed distribution, the private company group will no longer be a subsidiary of the company and will be held by the controlling shareholder and shareholders who choose the in-kind distribution through their holdings of private company shares. The company will continue to operate the retained businesses, and the shares will continue to be listed on the Stock Exchange.
The purpose of the proposed distribution is to enable shareholders to realize their investment in the company and reduce their investment risk related to the tourism real estate business associated with the company's shares, while allowing the company to focus on developing the retained businesses.
The board proposes to implement a proposed capital reduction, reducing the company's paid-up capital from HK$9.222 billion as of the date of this announcement by HK$8.5 billion to HK$722 million. The HK$8.5 billion credit arising from the proposed capital reduction will be transferred to the company's retained earnings, which the board may utilize as distributable reserves in accordance with the company's articles of association and the Companies Ordinance.