Hongan Group (01222) and Hongan Real Estate (01243) jointly announced that on March 28, 2024, Hong...
According to Zhitong Finance App, Hongan Group (01222) and Hongan Real Estate (01243) jointly announced that on March 28, 2024, Top List Holdings Limited, a wholly-owned subsidiary of Hongan Real Estate (01243), plans to sell all of the issued share capital of Beam Up Holdings Limited to Divine Glory International Limited and the loan owed by the project company to the seller at the time of completion. The total cost is about 797 million yuan Hong Kong dollars. Hongan Group and Hongan Properties Group estimate that they will lose approximately HK$249 million as a result of the sale.
According to reports, the target company is an indirect wholly-owned subsidiary of Hongan Real Estate, which directly owns the project company (the sole registered, legal and beneficial owner of the property). The total site area of the property is approximately 41,676 square feet, including each plot or plot of land registered with the Hong Kong Land Registry as Yau Tong Inland Lot No. 30 and Yau Tong Inland Lot No. 31, along with the houses, structures and buildings on it (currently known as Block 4, Yau Tong Industrial Building, 18 and 20 Si Shan Street, Kowloon, Hong Kong). Hongan Properties Group completed the acquisition of the property in May 2023, at a total cost of approximately HK$940.6 million.
The project involved the completion of a comprehensive residential development project by the project company, which included two residential buildings, parking spaces, non-residential commercial floors and government properties to be built after the redevelopment of the project in accordance with relevant land approval regulations; and the project company then sold the relevant reconstruction business for profit.
The buyer indirectly owned 50% of Hongan Real Estate's interest and 50% of the interest was indirectly owned by Hongan Properties.
The directors of Hongan and Hongan Real Estate both believe that the sale will allow Hongan and Hongan Properties to operate the project through the buyer. Since the project will no longer be wholly owned, this is expected to improve Hongan and Hongan Properties' respective liquidity. As a result, the sale will allow Hongan Real Estate to reallocate resources to future investment opportunities, capital needs (including funding requirements for this project that will no longer be wholly owned) and seek other growth opportunities.