EASYKNIT INT'L (01218) has disclosed that on August 28, 2026, after the trading session, its wholly-owned direct subsidiary, Yuheng Real Estate Holdings Limited, entered into a sale and purchase agreement with buyer Quantum Living Accommodation Limited, with the company acting as the seller's guarantor.
Under the terms of the agreement, the seller has conditionally agreed to sell, and the buyer has conditionally agreed to acquire, the sale shares representing the entire issued share capital of the target company, Success Active Limited, for a consideration of HK$529 million, subject to the conditions outlined in the agreement.
The target company is the sole legal and beneficial owner of the property, which primarily consists of a student accommodation facility named "Senli," situated at 470, 472, 474, 476, and 478 Chatham Road North, Kowloon, Hong Kong, with a total gross floor area of approximately 3,890.297 square meters.
The group has been actively seeking a suitable buyer for this property. The directors believe that, given the volatility in Hong Kong's real estate market, this sale offers the group an opportunity to monetize or liquidate the asset at a price close to its appraised value of approximately HK$524 million, while simultaneously boosting the group's liquidity position and providing additional cash resources for general working capital and future business development initiatives, as well as reducing the ongoing holding costs, capital expenditures, and operational commitments tied to the property.
The property is currently operated as a student apartment through a partnership between the group and the iRent Group, achieving a 100% occupancy rate. However, after considering the property's specific attributes, valuation, location, and market liquidity, the board concludes that the sale presents a timely opportunity to realize the property's value at the agreed consideration, unlock capital tied up in this single asset, mitigate the group's exposure to uncertainties such as fluctuations in future student demand, occupancy levels, operational expenses, maintenance and renovation needs, and regulatory risks, and enhance the group's liquidity and financial flexibility through the application of net proceeds in line with the company's stated intentions, including strengthening working capital and supporting ongoing business operations.
While retaining the property would allow the group to continue earning income from its fully leased operations, the board determines that the immediate realization of value, reduction of potential financing costs and liabilities, and the enhanced flexibility to reallocate capital toward the group's businesses and other opportunities outweigh the benefits of keeping the property. Consequently, the board considers the sale to be commercially reasonable, conducted on normal commercial terms, and in the best interests of the company and its shareholders as a whole.