Continental Aerospace Technologies Holding Limited (CAT, 00232) has agreed to divest its entire stake in wholly owned subsidiary Motto Investment Limited to Mobile AcquisitionCo, LLC for US$535.42 million. The disposal covers the subsidiary’s equity and outstanding shareholder/inter-company loans.
Transaction Structure • Consideration: US$535.42 million, comprising a US$50 million upfront payment (including a US$5 million earnest deposit) and a US$485.42 million closing payment subject to deductions for leakage, potential U.S. Paycheck Protection Program (PPP) settlement, and withholding tax. • Expected net proceeds: US$500 million–US$520 million after estimated deductions of US$15 million–US$35.42 million. • Basis: Enterprise value of approximately US$500 million plus US$35.42 million cash balance as of 31 Oct 2025.
Shareholder Returns • Special Dividend on Disposal: Entire net proceeds to be distributed in cash, estimated at HK$3.90 billion–HK$4.06 billion (HK$0.419–0.436 per share), representing a 103%–111% premium to the last traded price of HK$0.207. Payment will be made within seven business days of closing. • Cash Dividend on Property Disposal: Subject to separate approval, HK$68.02 million (HK$0.0073 per share) from the sale of CAT’s Hong Kong office will be paid to shareholders. • Additional special dividend: The board plans a further distribution from remaining cash once reserves for winding-up costs are finalised.
Delisting and Winding-Up Plan Post-disposal, CAT will lack sufficient operations and assets to meet Listing Rule 13.24. Conditional on transaction completion and dividend payment, the company will apply to delist from the Hong Kong Stock Exchange under Rule 6.15(2) and subsequently undertake a voluntary winding-up. Any residual assets realised during liquidation will be shared pro rata among shareholders.
Financial Impact • Target Group (Motto Investment and subsidiaries) unaudited results: FY2025 revenue HK$1.999 billion; net profit HK$93.20 million; net assets HK$151 million. • CAT expects an unaudited disposal gain of roughly HK$1.45 billion. • The office property sale is projected to book a HK$38 million loss versus its HK$107.52 million carrying value.
Regulatory & Shareholder Approvals • The disposal, special dividend and delisting require approval by at least 75% of votes cast by independent shareholders, with dissent capped at 10%. • Controlling shareholders AVIC Innovation (HK) Group and Tacko, holding 46.4% of shares, have irrevocably undertaken to support all resolutions. • U.S. antitrust (HSR) clearance has been received; German FDI clearance remains pending. • The property sale, a connected transaction with substantial shareholder AVIC Innovation (HK) Group, needs separate approval by disinterested shareholders and consent from the SFC Executive as a “special deal”.
Funding Assurance J.P. Morgan, financial adviser to the purchaser, confirmed sufficient resources—including a credit facility of up to US$500 million—to settle the consideration. CICC, adviser to CAT, confirmed that the special dividend will be fully covered by sale proceeds.
Next Steps A circular outlining the proposals, valuation report, and EGM notice will be dispatched shortly. If shareholders reject the proposals, CAT intends to retain the Target Group and continue existing operations. Shareholders are advised to exercise caution when dealing in the shares pending further announcements.
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