Duan Chuanliang and CHINA WATER (00855) hold more than 54% of KANGDA ENV (06136) stock, triggering a comprehensive cash offer.

KANGDA ENV (06136) and CHINA WATER (00855) jointly announced that on July 11, 2025 (after trading hours), the holder of the exchangeable bonds, Mr. Duan Chuanliang, has delivered an EB notice to Kangda Holdings to exchange for 547 million shares, representing approximately 25.55% of the total issued share capital of the company on the date of this joint announcement, at an exchange price of HK$0.25 per share. The EB exchange was completed on July 21, 2025, and following the completion of the EB exchange, Mr. Duan and Sharp Profit (presumed to be acting in concert with Mr. Duan) collectively hold interests in 1.156 billion shares, representing approximately 54.01% of the total issued share capital of the company. Sharp Profit (a wholly-owned subsidiary of CHINA WATER) is a major shareholder of the company, holding approximately 28.46% of the total issued share capital of the company on the date of this joint announcement. As a result of the EB exchange, Mr. Duan is required to make a mandatory unconditional cash offer for all shares (excluding those already held or agreed to be acquired by Sharp Profit) in accordance with Rule 26.1(b) of the Takeovers Code. Mr. Duan and Sharp Profit will jointly make (or cause others to make on their behalf) a share offer, and take up the shares validly tendered in the share offer, with Mr. Duan and Sharp Profit subscribing for approximately 93.00% and 7.00% of the shares, respectively. As of the date of this joint announcement, there are 214 million options outstanding, giving the option holders the right to subscribe for a total of 214 million shares at an exercise price of HK$0.30 per share. In accordance with Rule 13.5 of the Takeovers Code, if any of these options have not been exercised and have not expired, Mr. Duan must also make (or cause others to make on his behalf) a suitable offer to the option holders to cancel all unexercised options through an option offer. FIRST SHANGHAI Securities (the offer agent for the joint offerors) will make a cash offer of HK$0.348 per share to represent the joint offerors in making the share offer and on behalf of Mr. Duan in making the option offer. The offer price of HK$0.348 per share for the share offer is higher than the exchange price of HK$0.25 per share under the exchangeable bonds, and is equal to the weighted average trading price of HK$0.348 per share on July 1, 2025 when the EB notice was issued.