EASYKNIT INT'L (01218) announced that on October 10, 2025, Easyknit Properties (a direct wholly-owned subsidiary of the Company) entered into a sale and purchase agreement with EMINENCE ENT (00616), whereby Easyknit Properties (as vendor) conditionally agreed to sell, and EMINENCE ENT (as purchaser) conditionally agreed to acquire, the entire issued share capital of Zhuoyi (an indirect wholly-owned subsidiary of the Company), for a consideration of approximately HK$295.5 million minus an amount equivalent to the total net outstanding amounts payable by the ultimate holding company of Zhuoyi and fellow subsidiaries to Zhuoyi as at the completion date (calculated on an equivalent basis).
Zhuoyi's major asset is the Property, namely Shops 1, 2, 3 on ground floor with ground floor showcases, Shop 1 on first floor and Shop 1 on second floor of Garden Plaza, 19 Garden Street, Mongkok, Kowloon. The saleable area of the Property is 13,544 square feet.
Zhuoyi's other assets primarily include equity securities listed in Hong Kong, comprising 42.308 million shares of Bawelfare Holdings Limited (01488) and 268,000 shares of Ping An Insurance (Group) Company of China, Ltd. (02318), with an aggregate fair value of approximately HK$46.3 million as at March 31, 2025. The 42.308 million shares of Baffle Holdings Limited will be transferred to another wholly-owned subsidiary of the Company before completion.
As at the date of this announcement, the anticipated purchase price is approximately HK$268.4 million, which will be paid by EMINENCE ENT to Easyknit Properties through the issuance of 2025 convertible notes to Easyknit Properties or its nominee at completion.
The disposal of the Property through the sale of Zhuoyi forms part of the Company's usual strategy aimed at prudently maintaining its cash flow rather than continuously paying amounts required to fund the relevant net cash outflows. The disposal of the Property will not result in any expected loss to the Company and its shareholders; will provide a regular income source to the Group through interest on the 2025 convertible notes; will offset the Group's cash expenditure on the Property, which collectively exceeds the rental income generated by the Property; and will reduce the Group's gearing ratio (i.e., the percentage of total bank borrowings to total equity).