HON KWOK LAND (00160) announced that on October 28, 2025 (after trading hours), the seller (HKL Holdings (BVI) Limited, a direct wholly-owned subsidiary of the company) entered into a provisional sale and purchase agreement with the buyer (Xian Jun Management Limited). Under the agreement, the seller conditionally agreed to sell and transfer the sale shares and sale loans to the buyer.

The consideration for the sale shares and sale loans will consist of (i) the agreed property value of HK$338 million for the property, and (ii) the sum of the net asset value of the target group upon completion. For determining the consideration under the provisional agreement, the target group’s net asset value will exclude the book value of the property, the sale loans, any intercompany balances to be repaid, offset, replaced, terminated, or otherwise settled before completion, as well as any deferred tax liabilities (if applicable).

As of March 31, 2025, the target group’s unaudited consolidated net asset value was approximately HK$2.35 million, including current assets of about HK$3.51 million and current liabilities of around HK$1.16 million. Therefore, the estimated total consideration is approximately HK$340 million.

The target group comprises Oseling Investments, Yingdu, and Bauhinia Hotel (Tsim Sha Tsui). Oseling Investments is an investment holding company that owns 100% of Yingdu and Bauhinia Hotel (Tsim Sha Tsui), which respectively hold the property and the hotel license. The property is located at 5, 7, and 9 Observatory Court, Knutsford Terrace, Kowloon, Hong Kong. It is a 23-story building with a site area of approximately 3,937 square feet and a total gross floor area of about 60,894 square feet, operating under the name Bauhinia Hotel (Tsim Sha Tsui).

The group is committed to optimizing its property portfolio and resource allocation to prepare for its next growth phase. The board believes the disposal presents a valuable opportunity to unlock the investment value of the property, generating positive cash flow for the group. Additionally, the sale will help reduce bank borrowings, improve liquidity, and strengthen the group’s overall financial position.

Based on the estimated consideration of HK$340 million, the net proceeds from the disposal (after full repayment of bank loans) are expected to be approximately HK$141 million. These proceeds will supplement the group’s working capital, enhance liquidity, and reinforce its financial stability.