CHINA TRAVEL HK plans to distribute its tourism real estate business to shareholders in physical form

According to the announcement from CHINA TRAVEL HK (00308), the board of directors regularly conducts strategic reviews of the group's business, adhering to the strategic vision of being a "first-class tourism destination investment and operation service provider," continuously enhancing core competitiveness and overall profitability. To achieve the professional development of the group's core business, the board hereby proposes a suggested distribution to shareholders. After the suggested distribution is completed, the group's profitability is expected to improve. The group will also further optimize its operating model, allocating more resources to core businesses. The board believes that the suggested distribution is in the overall interest of the company and its shareholders.

According to the suggested distribution implemented for shareholders listed on the company's shareholder register as of the record date, the company will internally restructure its tourism real estate business, making it held by a private company and establishing a private company group, and will spin off the private company group from the group through the physical distribution of private company shares.

Under the suggested distribution, shareholders can choose: (i) to receive private company shares based on their shareholding ratio in the company as of the record date; or (ii) to receive cash in lieu, if the shareholder (1) chooses not to accept and obtain private company shares; (2) is unable or not permitted under applicable laws and regulations to hold private company shares; and/or (3) does not respond to the request to choose, accept, and obtain private company shares (except for Hong Kong Central Clearing (Agent) Limited, which may choose to receive cash payment for part or all of the allocation under the suggested distribution).

After the completion of the suggested distribution, the private company group will no longer be a subsidiary of the company and will be held by the controlling shareholder and shareholders who choose the physical distribution through holding private company shares. The company will continue to operate its retained business, and the shares will continue to be listed on the Stock Exchange.

The purpose of the suggested distribution is to allow shareholders to realize their investment in the company and reduce their investment risk associated with the tourism real estate business related to the company's shares, while allowing the company to focus on developing its retained business.

The board of directors proposes to implement a suggested capital reduction, reducing the company's capital account from HKD 9.222 billion as of the date of this announcement by HKD 8.5 billion to HKD 722 million.

The HKD 8.5 billion in capital generated from the suggested capital reduction will be transferred to the company's retained earnings, and the board may use this amount as distributable reserves in accordance with the company's articles of association and company regulations