LAI GROUP (ASX: 08455) has announced the signing of a sale and purchase agreement following the close of trading on June 5, 2026. The agreement involves the seller, Jingtian Group Limited (a direct wholly-owned subsidiary of the company), the buyer, Dr. Chen Lishan (the company's Vice Chairman, Executive Director, and a major shareholder), and the target company, Fame Protector Limited.

The key terms of the agreement are as follows: the seller conditionally agrees to sell, and the buyer conditionally agrees to purchase, the entire equity interest in the target company for a consideration of HK$1. Additionally, the buyer conditionally agrees to repay a shareholder loan amounting to HK$7.6 million to Junzhi, an indirect wholly-owned subsidiary of the company, upon completion of the transaction, subject to the terms and conditions stipulated in the agreement.

As of the date of this announcement, the target company is an indirect wholly-owned subsidiary of the company, and its principal asset is a specific property. Upon completion, the target company will cease to be a subsidiary.

Fame Protector Limited is a company incorporated in Seychelles on January 4, 2016, primarily engaged in investment holding. Its sole significant asset is the property, which comprises an office unit with a total usable area of approximately 82.037 square meters (883 square feet), located at Room H, 19th Floor, Tower 1, Kings Wing Plaza, 3 On Kwan Street, Shek Mun, Shatin, New Territories, Hong Kong.

As disclosed in the company's prospectus dated March 31, 2017, the original acquisition cost of this property was HK$9.6 million. Currently, the property serves as the group's headquarters, and this arrangement is expected to remain unchanged after the transaction's completion.

Over recent financial years, the group has consistently reported losses, primarily attributed to persistently unfavorable and highly competitive market conditions in Hong Kong, which have led to reduced revenue. The target company, as an investment holding entity with its main asset being the office property, has not generated any external revenue or operating income for the group.

Given the anticipated continued uncertainty in the Hong Kong property market in the short term, driven by broad economic fluctuations and the aforementioned factors, the Board considers the disposal to be a timely opportunity for the group to strengthen its working capital. It also allows for a more effective allocation of resources to pursue other business opportunities with greater potential.

Following the completion of the sale, the group is expected to enter into a new lease agreement for the property. The terms of this lease will be negotiated on an arm's length basis under general commercial terms, with reference to the prevailing market rents for comparable properties in the vicinity. As the group will continue to occupy the property as its headquarters post-completion, the disposal is not expected to have any material adverse impact on the group's day-to-day operations.