KWUNGS AROMA (01925) plans to acquire land in Thailand.

KWUNGS AROMA (01925) announcement that on May 26, 2025, Kwungs Investments (a direct wholly-owned subsidiary of the company, as the buyer) entered into a land purchase agreement with several sellers and Dragon (as the agent of the relevant sellers) to purchase three pieces of land located in Thailand - Sale Land I, Sale Land II, and Sale Land III, for prices of 56.214 million Thai Baht, 57.75 million Thai Baht, and 32.897 million Thai Baht respectively. On March 4, 2026, Kwungs Investments and Kwungs Thailand (an indirect wholly-owned subsidiary of the company) entered into a transfer agreement regarding the land purchase agreements. As per this agreement, the rights and responsibilities of Kwungs Investments have been transferred to Kwungs Thailand. As of the date of this announcement, Kwungs Investments has paid a total of 44.0583 million Thai Baht to the sellers as a booking fee. On March 4, 2026, due to Kwungs Thailand not yet obtaining approval from the Thailand Board of Investment and relevant government departments for the ownership of the sale land, Kwungs Thailand was unable to complete the acquisition of the sale land as per the land purchase agreements. Therefore, Kwungs Thailand entered into a memorandum with Mr. Thithinan (a shareholder holding 50% stake in Dragon), under which (1) Mr. Thithinan will purchase the sale land and subsequently transfer it as per Kwungs Thailand's instructions; (2) Kwungs Thailand will provide a loan to Mr. Thithinan, with the sale land I and sale land II being mortgaged as collateral. In response to global economic and geopolitical developments, aside from the production base in China, the group is actively expanding its overseas production capacity. The group is currently setting up new production facilities in Thailand, and the acquisition of sale land is part of the group's process of establishing production capacity in Thailand. Initially, the group expected to directly acquire the sale land from the sellers through the land purchase agreements. However, since the agreements were made, the group has been unable to obtain the necessary approval from the Thai government to have ownership of the sale land through Kwungs Thailand. The original deadline for completion under the land purchase agreements was February 28, 2026, which has been extended to March 4, 2026. To prevent the sellers from deciding to refuse further extension of the deadline and withdraw from the transaction, leading to the group losing the opportunity to acquire the sale land and not being able to recover the booking fee paid, the group has had discussions with Mr. Thithinan, who has agreed to assist by purchasing the sale land, and then transferring it to the group once all necessary approvals are obtained. If the group fails to obtain the necessary approvals, it has the right to instruct Mr. Thithinan to sell the sale land at a price determined at the group's full discretion (except for Sale Land III). The purchase price for Sale Land I and Sale Land II is 114 million Thai Baht, which is the same as the loan amount, and the directors believe that the group's risk exposure in this regard has been adequately covered. Additionally, the loan provided to Mr. Thithinan will be secured by the mortgages of Sale Land I and Sale Land II. Therefore, the directors believe the credit risk of the loan is low.