Fantasia retains about 9.98% of issued shares of Colour Life

Fantasia Holdings (01777.HK) has finalized a restructuring agreement to resolve a long-standing dispute involving its stake in COLOUR LIFE SERVICES GROUP CO., LIMITED (03999.HK). Under the terms, the company sold approximately 21.97% of its COLOUR LIFE shares (409 million shares) to Splendid Fortune Enterprise Limited at HK$0.087 per share, a 48.82% discount to the Hong Kong closing price of HK$0.17 on the agreement date. Proceeds from the sale will be applied by TFISF, a creditor, to reduce Fantasia's outstanding debt. Additionally, TFISF transferred 10.0% of its COLOUR LIFE shares to a designated entity as part of debt enforcement measures. Following these transactions, Fantasia retains 186 million COLOUR LIFE shares, representing approximately 9.98% of the issued share capital, free from encumbrances or claims.

The restructuring also includes a debt novation by Fantasia's subsidiary, Sky Ease, to assume new obligations without recourse to the parent company or other group entities. The Group anticipates recognizing a net loss of approximately RMB 1.409 billion, calculated based on the sale proceeds, share transfers, and COLOUR LIFE's net asset value. Upon completion, COLOUR LIFE will no longer be classified as a subsidiary of Fantasia. The Board evaluated factors including legal risk assessments, market conditions, and the potential adverse impact of unresolved debt, ultimately deeming the agreement necessary to stabilize the company's financial position. Investors are advised to monitor the implications of reduced ownership and ongoing debt restructuring efforts on Fantasia's balance sheet.