CHINA ECOTOUR (01371) is seeking for a restructuring and formulating proposed restructuring terms.

CHINA ECOTOUR (01371) Announcement: In view of the winding up petition and the serious financial difficulties currently facing the company, the Board of Directors intends to seek restructuring and propose terms for the restructuring, believing that this is in the best interests of all stakeholders of the company (including creditors). The proposed restructuring includes (but is not limited to) capital restructuring; cancellation of share premium; and creditor schemes. Upon approval by independent shareholders, the company proposes to implement capital restructuring, involving share consolidation; reduction of capital; share subdivision; and increase in statutory share capital. The proceeds from the capital restructuring will be transferred to the paid-up retained earnings account, for the Board of Directors to use in any manner they deem appropriate within the limits allowed by applicable laws and regulations. It is expected that the proceeds in the paid-up retained earnings account will be used to offset the company's accumulated losses. The Board of Directors proposes a resolution to be submitted to independent shareholders for approval, regarding the cancellation and zeroing of the entire amount in the share premium account on the effective date of cancellation, with the proceeds transferred to the paid-up retained earnings account, and authorizing the Board of Directors to use the funds in any manner permitted by applicable laws and regulations. It is expected that the proceeds in the paid-up retained earnings account will be used to offset the company's accumulated losses. Following the effectiveness of the capital restructuring, the Board also proposes to change the trading unit of the company's shares from 10,000 shares to 2,000 new shares. The creditor scheme will be implemented, with creditors who have filed claims under the scheme entitled to receive plan shares (a total of 326,666,666 new shares) or sell the plan shares held by the company (up to a maximum limit of 65,000,000 plan shares) for cash. Creditors may choose to receive the plan shares they are entitled to by equity election or to receive cash for the sale of the plan shares held by the company on their behalf (up to a maximum limit of 65,000,000 plan shares). If the equity in the plan shares chosen for cash exceeds the limit, participating creditors will receive a proportionally reduced distribution based on their respective equity in the plan shares. Any remaining equity in the plan shares chosen for cash will be considered as an equity election, with the corresponding number of plan shares to be distributed and issued to participating creditors. For creditors choosing cash election, the company (as the interests of non-equity election creditors) shall have the right (at the discretion of the plan administrator) to sell plan shares on the open market or over-the-counter at a price determined by the company, representing the relevant creditors, at a price of not less than HK$0.15 per plan share. Any shortfall in the sale price shall be guaranteed by the company, with a minimum guarantee price of HK$0.15 per plan share, to ensure that at least HK$0.15 per plan share is received on the sale. The expenses incurred under the guarantee will be borne by Trnty Eagle. The proceeds from the sale of plan shares (after deduction of realization costs and payment of any applicable taxes or stamp duty) will be paid by the plan administrator to the creditor in full settlement of their rights in the plan shares upon completion of the sale. The company must ensure that the off-market buyers under the sale will not become shareholders or parties acting in concert with Trnty Eagle and Mr. Chen, and will be independent third parties. Upon approval by creditors, independent shareholders, the Hong Kong Court, and relevant regulatory authorities, and following the completion of the creditor scheme, all claims against the company and the company's liabilities, as well as claims against the company's subsidiaries (guaranteed by the company) will be fully settled, resolved, and discharged. It is clarified that any liabilities of the Group that are not subject to the creditor scheme (i.e. priority claims (estimated at approximately HK$48,000 as of June 30, 2025), restructuring costs (estimated at approximately HK$7.4 million as of June 30, 2025), operational debt (estimated at approximately HK$700 thousand as of June 30, 2025), secured claims (as of June 30, 2025, the company is not aware of any secured claims), winding up costs (due to the ongoing winding up petition), and payments to Mr. Chen for working capital financing and payments to Trnty Eagle as committed by Trnty Eagle) will not be settled, resolved, or discharged after the completion of the creditor scheme. The estimated amount of claims voted on in the creditors' meeting is approximately HK$4.896 billion. Since interest accumulated until the effective date of the creditor scheme can be proven or accepted as part of the claim, the company expects the total amount of claims filed to be no less than HK$4.90 billion.