Central China (ASX: 00832) has announced the signing of a share transfer agreement to sell its interests in the "Only Henan · Drama Fantasy City" and "Central China Movie Town" assets.

The agreement, dated July 23, 2026, involves the company, its subsidiaries Henan Zhongyuan and Yilu Youxi, and the buyers—Henan Chenyu Maitian Cultural Industry Co., Ltd. and Henan Chenyu Yilu Youxi Cultural Industry Co., Ltd., both affiliates of Trustar Capital entities. The total consideration for the acquisition of the target assets is RMB 3 billion.

Upon completion of the transaction, the group will no longer hold any interest in the target companies or the underlying assets, and their financial performance will be deconsolidated from the group's statements. Concurrently, Henan Zhongyuan and Yilu Youxi will become indirect wholly-owned subsidiaries, allowing the group to retain the remaining assets.

The target companies, Henan Maitian Cultural Industry Co., Ltd. and Henan Yiluyouxi Cultural Industry Co., Ltd., are wholly owned by Henan Zhongyuan and Yilu Youxi, respectively. They were newly established as holding companies specifically for this transaction, with the restructuring and asset injection completed as of the announcement date.

The assets being sold comprise the operational assets and businesses related to the "Only Henan · Drama Fantasy City" project and the "Central China Movie Town" project.

The board believes the divestment will enable the group to sharpen its focus on its core property development business and reallocate financial and managerial resources accordingly. Given that the target assets are operationally distinct and managed separately from the main business, the transaction is not expected to adversely impact the group's core operational capabilities or its property development strategy.

Furthermore, the target assets are capital-intensive, requiring ongoing investment for cultural tourism operations, staffing, and maintenance, and are burdened with significant bank and other debts. Much of the cash flow generated has been and will continue to be used for servicing these debts, which constrains the group's liquidity and financial flexibility.

Following the transaction, the group will be relieved of these assets and their associated debts and guarantees, thereby alleviating funding burdens and debt pressure and improving its liquidity position. The proceeds are expected to further strengthen the group's balance sheet and support its deleveraging efforts.