KWOON CHUNG BUS (00306.HK): Disposal of 34.3% Stakes Completed, 51% Disposal Terminated

NewTimeSpace News: On 22 September 2026, Kwoon Chung Bus Holdings Limited (stock code: 00306) published an inside information announcement on a previously disclosed potential disposal. Following a spin-off, the target company has been divided into Li County Bipenggou Tourism Development Co., Ltd. (Target Company One) and Li County Bipenggou Scenic Area Antu Co., Ltd. (Target Company Two). Buyer Two has also been divided into two acquisition vehicles, namely Chengdu Xintianfu Cultural Tourism Development Co., Ltd. (Buyer Two, acquiring Target Company One) and Chengdu Xiling Snow Mountain Tourism Development Co., Ltd. (Buyer Three, acquiring Target Company Two). Buyer Three is a wholly state-owned enterprise and an independent third party. The shareholding of Seller One and Seller Two in the spun-off target companies remains unchanged at 51.0% and 34.3% respectively.

Following completion of the spin-off, on 8 September 2026 Seller Two entered into an equity transfer agreement with Buyer Two for the disposal of the 34.3% equity interest it directly held in Target Company One, and entered into a further equity transfer agreement with Buyer Three for the disposal of the 34.3% equity interest it directly held in Target Company Two, with the aggregate consideration for the two transfers amounting to approximately RMB 225,166,000. As at the date of the announcement, all conditions precedent to completion of the equity transfers have been fulfilled, and Seller Two has entered into equity completion confirmations with Buyer Two and Buyer Three respectively confirming completion of the transfers.

As regards the potential disposal of the 51.0% equity interest in the spun-off target companies held by Seller One, the proposed acquisition will not proceed as Buyer One's application to its higher-level competent authority for approval was not approved. Buyer One and Seller One have confirmed that the potential disposal of that interest can no longer be implemented under the original proposal and that no formal agreement will be entered into in respect of it, and the parties will make follow-up arrangements in accordance with the relevant terms of the letter of intent. The Board considers that the terminated acquisition will not have any material adverse impact on the existing business, operations or financial position of the Group.

Following completion of the equity transfers, the Group's effective interest in the spun-off target companies will decrease from approximately 67.8% to 51.0%; as Seller One continues to hold 51.0% directly, the Group will continue to maintain control, and the spun-off target companies will remain subsidiaries of the Group whose accounts will continue to be consolidated into the Group's consolidated financial statements. Based on the Group's audited accounts for the year ended 31 March 2026, the aggregate net asset value of the spun-off target companies as at that date was approximately HKD 305,987,000 (equivalent to approximately RMB 269,474,000).

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