MAN SANG INT'L (00938) plans to sell all of the issued share capital of Decent Start Limited.

MAN SANG INT'L (00938) announced that on March 12, 2026, the company (as the seller) entered into a sales agreement with the buyer China JinNiu Group Limited, the acceptor of the promissory note, and the guarantor. According to the agreement, the company has conditionally agreed to sell, while the buyer has conditionally agreed to acquire all the issued shares of the target company Decent Start Limited; and the company has conditionally agreed to facilitate the transfer of the sales loan seller (a wholly-owned subsidiary of the company), while the buyer has conditionally agreed to take over the sales loan. Upon completion, the target company will no longer be a subsidiary of the group, and its financial performance, assets, and liabilities will no longer be consolidated into the group's financial statements. The price payable by the buyer to the company for the sale of shares is HKD 88.5 million and the price payable by the buyer to the sales loan seller for the sale of the loan is HKD 15.5 million. The total price of HKD 104 million (including HKD 88.5 million for the purchase of shares and HKD 15.5 million for the purchase of the loan) must be paid in full by the buyer, who must ensure that the acceptor of the promissory note offsets the outstanding principal amount of the promissory note equal to the amount of the consideration at completion, and the relevant unpaid promissory note will be correspondingly canceled. The main asset of the selling group is the Hokkaido Hotel located in Yoichi-cho, Hokkaido, Japan. The business of Hokkaido Hotel has been significantly affected by the increase in operating costs, including labor shortages and wage increases. Competition from local and international operators has further put pressure on the operations of Hokkaido Hotel. The consideration will offset the equivalent amount of the outstanding promissory note. After completion, the principal amount of the outstanding promissory note will be reduced to approximately HKD 446 million. The directors believe that the proposed sale will alleviate the significant working capital pressure on the company, improve its overall financial situation, and improve the group's capital adequacy ratio.