EASYKNIT INT'L plans to sell all of its issued share capital of Zhuoyi to Gaoshan

According to the announcement from Easyknit International (01218), on October 10, 2025, Easyknit Properties (a wholly-owned subsidiary of the company) entered into a sale and purchase agreement with GaoShan (00616), in which Easyknit Properties (as the seller) conditionally agreed to sell, and GaoShan (as the buyer) conditionally agreed to acquire all issued share capital of ZhuoYi (an indirectly wholly-owned subsidiary of the company), for a price that is the total net amount of outstanding payments that the ultimate holding company of ZhuoYi and its affiliated companies are expected to pay to ZhuoYi on the completion date, amounting to approximately HKD 295.5 million (calculated on an equivalent basis). The significant asset of ZhuoYi is the property located at Shop 1, 2, 3 on the Ground Floor and Shop 1 on the First and Second Floors of Garden Square, 19 Garden Street, Mong Kok, Kowloon. The saleable area of the property is 13,544 square feet. ZhuoYi's other assets mainly include listed equity securities in Hong Kong, including 42.308 million shares of Baifuk Holdings Limited (01488) and 268,000 shares of China Ping An Insurance (Group) Company Limited (02318), with a total fair value of approximately HKD 46.3 million as of March 31, 2025. The 42.308 million shares of Baifuk Holdings Limited will be transferred to another wholly-owned subsidiary of the company before completion. As of the date of this announcement, the expected purchase price is approximately HKD 268.4 million, which will be paid by GaoShan to Easyknit Properties or its agent through the issuance of convertible bonds due in 2025 on the completion date. The sale of ZhuoYi and the property is part of the company's usual strategy, aimed at prudently maintaining its cash flow rather than continuously funding the necessary payments for related net cash outflows. The sale of the property will not result in any expected loss for the company and its shareholders; it will provide a regular income source for the group through the interest on the convertible bonds due in 2025; it will offset the cash expenditures incurred by the group for the property, which exceed the rental income generated by the property; and it will reduce the group's debt-to-equity ratio (i.e., the percentage of total bank borrowings to total equity)