REDCO HEALTHY (02370): Redco Properties may sell its 24% stake in the company.

REDCO HEALTHY (02370) announced that regarding the appointment of a receiver for 75% of the company's issued shares. On December 31, 2025, the company received a letter from Mr. Li Yinglin, as the receiver of 1.5 billion pledged shares (equivalent to 75% of the total issued shares of the company), which had been pledged as security for the debt owed by the controlling shareholder of the company, Lightheart Estates Group Limited (Lightheart Estates). On May 23, 2026, the company was informed by Lightheart Estates that they had received a letter from the receiver indicating that, despite continuous marketing efforts, no viable commercial offers had been received for the pledged shares as the financing remained in default. The letter stated that Central Worldwide Limited (as the sole registered lender under the financing) had proposed to purchase 48 million ordinary shares of the company (the target shares) from the pledged shares, equivalent to 24% of the company's issued share capital, for HK$45.12 million. The price would be paid by offsetting the outstanding part of the financing owed by Lightheart Estates. This price would be based on a reference to the closing price of the shares on the Hong Kong Stock Exchange on May 15, 2025, at HK$0.94 per share. Considering the continued default under the financing by Lightheart Estates, the receiver, after continuous marketing efforts since appointment, and the proposed terms of the sale, issued a formal notice to Lightheart Estates. Unless by the close of business on May 26, 2026, (i) Lightheart Estates found a buyer willing to purchase the target shares for not less than HK$45.12 million, (ii) the full outstanding part of the financing was repaid, or (iii) Lightheart Estates presented valid reasons to object, the receiver would regard Lightheart Estates as having no objections to the sale and agree to proceed with it under fair and reasonable circumstances. The receiver would continue to sign the relevant transaction documents and implement the sale without further notice to Lightheart Estates. Lightheart Estates stated that they had been negotiating with the lender, requesting a temporary enforcement extension while continuing friendly discussions to seek alternative solutions. However, on May 22, 2026, the lender indicated that they would not grant further repayment extensions unless repayment was made. As Lightheart Estates lacked financial resources to fully repay the HK$45.12 million by May 26, 2026, it was expected that the receiver would dispose of the target shares to the lender by that date. Therefore, it is anticipated that by May 26, 2026, the target shares (equivalent to 24% of the company's issued share capital) will be sold to the lender to offset part of the financing owed by Lightheart Estates. If the sale of the shares occurs, Lightheart Estates will only hold a 51% equity interest in the company (rather than 75%), and the lender will become the major shareholder of the company. According to the announcement made by Lightheart Estates on May 22, 2026, they cannot guarantee whether the receiver/lender will further dispose of the remaining pledged shares. If the receiver/lender seeks to further dispose of the pledged shares, it may result in the company no longer being consolidated in the financial statements of Lightheart Estates. At present, the company cannot estimate the actual impact of the sale on the company's financial or business performance, but it is expected not to have an immediate significant adverse effect. The board of directors will continue to monitor the situation and request Lightheart Estates to provide further updates on the matter.