On September 26, CIFI Holdings Group Limited announced insider information regarding the execution of a commitment letter with LMR for the proposed sale of ordinary shares in ES Services Group Limited ("ES Services").
According to the announcement, CIFI Holdings stated that on September 26, 2025 (after trading hours), it entered into a commitment letter with LMR regarding the proposed transaction to reach an optimal transaction structure agreement that achieves the agreed commercial objectives outlined below.
CIFI Holdings and LMR intend to execute the proposed transaction to achieve the following commercial objectives: (a) sell 142,387,000 ES Services shares to LMR, with the number of shares subject to adjustment through negotiation between the company and LMR to reflect any dilution events; sell at a price of at least HK$1.936 per ES Services share, equivalent to 110% of the closing price per ES Services share on September 25, 2025, with LMR acquiring these ES Services shares at this price.
For LMR, the proposed transaction is purely a financial investment, part of an equity growth strategy centered on future ES Services stock price appreciation. LMR has no intention and will not seek to participate in ES Services' management, nor will it enter into any agreements or arrangements with ES Services to obtain board seats, any other management rights, or special rights not enjoyed by other ES Services shareholders.
LMR's sole investor is the Cayman Islands subsidiary fund LMR Multi-Strategy Fund Limited, with LMR's investor base primarily composed of institutional investors and high-net-worth individuals. As of the announcement date, no investor holds 10% or more of LMR's issued shares. LMR Partners Limited serves as one of LMR's investment managers, maintains a physical office in Hong Kong, and holds a Type 9 (Asset Management) license issued by the Hong Kong Securities and Futures Commission.
ES Services is listed on the Hong Kong Stock Exchange as a comprehensive property management service provider. As of June 30, 2025, ES Services Group provides property management services, value-added services, and city services in 100 cities across mainland China, with total contracted gross floor area of approximately 354.9 million square meters. Of this, total managed gross floor area is approximately 253.7 million square meters, serving over 1,120,000 households. The business includes residential and non-residential properties, covering office buildings, shopping malls, schools, hospitals, scenic areas, government buildings, highway service stations, rail transit, and ferry terminals.
As of the announcement date, CIFI Holdings indirectly holds approximately 23.54% of ES Services' issued share capital, with ES Services consolidated in the company's financial statements.
Under the scheme, a prerequisite for the effective date of the restructuring is that CIFI Holdings must have sufficient funds to fulfill payment obligations to creditors and third-party institutions. Given the group's limited available cash, additional funding must be raised to meet the above prerequisites for the restructuring effective date to be achieved.
CIFI Holdings has identified its indirectly held ES Services equity as a readily liquidatable asset available for financing purposes. However, bulk sales of held ES Services equity could only be achieved at significant discounts. Such sales would result in value destruction, contrary to the interests of the company, company shareholders, or company creditors.
In contrast, entering into the commitment letter for the proposed transaction allows CIFI Holdings to effectively achieve liquidity objectives while avoiding the significant discounts and negative market impacts associated with bulk sales of listed securities.
The total proceeds from the proposed transaction are estimated at approximately HK$275,661,000, which will be treated as sale proceeds for CIFI Holdings' restructuring of offshore debt and liabilities. Under the scheme, CIFI Holdings is currently expected to use the net proceeds from the proposed transaction to make required payments to creditors and third-party institutions on or before the restructuring effective date.
Comments