FANTASIA Holdings (01777) announced that the Company, TFISF, and the buyer Splendid Fortune Enterprise Limited entered into a restructuring agreement on January 2, 2026. Under this agreement, the contracting parties have conditionally agreed to undertake a series of parallel transactions to resolve a dispute. These transactions involve: the buyer acquiring the sale shares (409 million COLOUR LIFE shares, representing approximately 21.97% of the issued shares of COLOUR LIFE as of the date of this announcement) at a price of HK$0.087 per COLOUR LIFE share (a subsidiary of the Company). TFISF will apply the consideration (i.e., the proceeds from the sale of the sale shares); the transfer of TFISF shares (representing approximately 10.0% of the issued shares of COLOUR LIFE as of the date of this announcement) to an entity designated by TFISF as effective enforcement of the alleged guarantee; the deduction of the consideration and the agreed share value from the alleged debt, thereby reducing the total debt payable to TFISF to a net balance. The Company will retain its shares (representing approximately 9.98% of the issued shares of COLOUR LIFE as of the date of this announcement), which are not subject to the alleged guarantee or any other claims and have been fully released and discharged; and (subject to the fulfillment or waiver of the conditions for completing the restructuring on or before the Long Stop Date) a debt novation conducted by a subsidiary of the Company, Sky Ease, on a non-recourse basis to the Company and other members of the Group (excluding the pledgors under the existing share charge and the companies whose shares will be subject to the share charge), and the assumption of the new debt arising therefrom. For the purposes of the restructuring agreement, the value per COLOUR LIFE share is HK$0.087, representing a discount of approximately 48.82% to the closing price of HK$0.17 per COLOUR LIFE share on The Stock Exchange of Hong Kong on the date of the restructuring agreement. The total consideration for the sale shares, calculated at HK$0.087 per sale share, amounts to $4.5284 million. Subject to final audit, the Group is expected to recognize a net loss of approximately RMB 1.409 billion. This amount is calculated with reference to the consideration from the sale of the sale shares (representing approximately 21.97% of COLOUR LIFE's issued shares as of the date of this announcement), the transfer of TFISF shares to a TFISF-designated entity as effective enforcement of the alleged guarantee (representing approximately 10.0% of COLOUR LIFE's issued shares as of the date of this announcement), and the net asset value of COLOUR LIFE. The proceeds from the sale of the sale shares (i.e., the consideration) will be applied by TFISF to reduce the Company's exposure to TFISF. The Company will not receive any cash proceeds from the other transactions contemplated under the restructuring agreement, including but not limited to the transfer of TFISF shares to the TFISF-designated entity, the debt novation, and the assumption of new debt. Upon completion of the sale of the sale shares, COLOUR LIFE will cease to be a subsidiary of the Company. Immediately following the sale of the sale shares and the transfer of TFISF shares to the TFISF-designated entity, the Company will retain 186 million COLOUR LIFE shares (free from the alleged guarantee) as of the date of this announcement, representing approximately 9.98% of the issued share capital of COLOUR LIFE. Prior to entering into the restructuring agreement, the Board of Directors considered several factors, including: the efforts made by the contracting parties to resolve the dispute to date; the opinions provided by the Company's legal advisors regarding the potential outcomes of the dispute; the lack of sufficient interest in COLOUR LIFE shares during the tender offer; the current market conditions and sentiment in the Chinese real estate sector; the Company's plan to implement the proposed debt restructuring; and the significant adverse impact that a failure to implement the proposed debt restructuring as scheduled could have on the Company, which would in turn affect shareholders' equity.
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