POWERLONG (01238) intends to sell 1.61 billion shares of POWERLONG CM (09909) for 3.61 billion Hong Kong dollars.

POWERLONG (01238) announced that on January 27, 2026, the seller POWERLONG (Viking) Holdings Limited (wholly owned by the company) and the buyer Prime Capital Investment Limited entered into an agreement for the sale of target shares (1.61 billion shares of POWERLONG CM (09909) issued share capital) for a total consideration of HK$361 million. After completion, POWERLONG CM will still be a non-wholly-owned subsidiary of the company, and its financial performance, assets, and liabilities will continue to be consolidated into the company's performance. Since the second half of 2021, the Chinese real estate industry has entered a phase of deep adjustment, and the liquidity of the group is facing unprecedented pressure. To alleviate liquidity pressure, the group has actively strengthened financial risk management and implemented various measures, including accelerating the pre-sale and sale of properties under development and completed properties, accelerating the collection of sales proceeds and other receivables, extending the debt maturity of some borrowings, seeking new financing channels, advancing potential asset disposals, and controlling expenses. However, due to the complex operating environment, the group's sales recovery has been slow, and the tight liquidity situation is becoming increasingly severe. In recent years, the company has been working with its professional advisors to advance a comprehensive management solution for the company's overseas debts, with the aim of respecting the rights of all stakeholders and hoping to release the inherent value of the group's business and assets as the domestic operating environment gradually improves. The group has engaged in constructive dialogues with special group members and their respective advisors to achieve a debt restructuring based on the consensus of all parties. Therefore, a restructuring plan has been formulated to respect the existing rights of creditors and treat all creditors fairly; ensure a sustainable capital structure in the long term and further stabilize the group's operations; and protect the rights and interests of all stakeholders. On October 10, 2025, the company entered into a restructuring support agreement in relation to the restructuring, which has received wide support from creditors. As announced by the company on December 19, 2025, as of that date, creditors holding over 85.48% of the planned debt had submitted letters agreeing to join the restructuring support agreement. According to the terms and conditions of the restructuring, the restructuring consideration will include one or more options based on the choice of planned creditors, including but not limited to the sale or pledge of POWERLONG CM shares by the company to raise a total of US$40 million in cash. By transferring the ownership rights of the target shares to the buyer, the group will receive cash benefits in a relatively short period of time. This cash benefit can improve the liquidity situation of the group and will be used to provide funds for the restructuring, plan, and daily operations of the group. Therefore, the sale reflects the continued support of the group's controlling shareholder while ensuring continuity in the management of the group and POWERLONG CM, as the ultimate controlling shareholders of both companies will remain unchanged after the sale transaction.