CON AERO TECH (00232) plans to sell 100% equity of Motto Investment Limited.

CON AERO TECH (00232) announces that on June 5, 2026, the company, the buyer MOBILE ACQUISITION CO, LLC, and the buyer's guarantor entered into a purchase agreement. Under the terms and conditions of the agreement, the company agrees to sell and the buyer agrees to purchase all the issued share capital of Motto Investment Limited (a wholly-owned subsidiary of the company), and settle shareholder and inter-company loans at the sale price. After the completion of the transaction, the company will no longer hold any equity interest in the target company or any other target group company. The Board recommends that, upon the satisfaction of all applicable conditions (including approval of the sale by independent shareholders at a special general meeting, special dividend for the sale, proposal for delisting; and completion of the delivery), the sale price received at completion will be fully distributed as a special dividend for the sale. Based on the company's current information, assuming completion of the transaction, the estimated sale price is expected to be between 500 million US dollars to 520 million US dollars. Therefore, assuming completion of the transaction and no change in the number of issued shares before the relevant record date, the estimated special dividend for the sale is expected to be approximately 500 million US dollars (equivalent to approximately 3.902 billion Hong Kong dollars or cash per share of 0.419 Hong Kong dollars); and approximately 520 million US dollars (equivalent to approximately 4.058 billion Hong Kong dollars or cash per share of 0.436 Hong Kong dollars). Once approval is obtained from independent shareholders at a special general meeting, the Board will declare the special dividend for the sale in Hong Kong dollars in accordance with Rule 20.1 of the Takeover Code, which will be distributed proportionally to eligible shareholders as soon as possible but no later than 7 business days after completion (as defined in the Takeover Code). After the distribution and payment of the special dividend for the sale, the company will apply to the Stock Exchange for the cancellation of its listing status in accordance with Rule 6.15(2) of the Listing Rules. In addition to the special dividend for the sale, the Board recommends that after approval from independent shareholders at a special general meeting for the property sale and cash dividend for the property sale; and upon completion of the property sale, the company will sell the property and declare the sale price to eligible shareholders in proportion (net of stamp duty) as the cash dividend for the property sale. The property sale price (net of stamp duty) will be 68.02 million Hong Kong dollars. Therefore, assuming no change in the number of issued shares before the relevant record date, the cash dividend for the property sale will be approximately 68.02 million Hong Kong dollars (equivalent to approximately 0.73 Hong Kong cents per share). The Board believes that due to the sale, the company will not have sufficient operational levels and valuable assets to support its continued operation under Listing Rule 13.24(1) to stay listed. Therefore, the company should voluntarily delist from the Stock Exchange in accordance with applicable regulatory requirements after completion of the sale. On June 5, 2026, the company entered into a property sale agreement and conditionally agreed to sell the property to China Aerospace Technology Corporation (Hong Kong) for a price of 69.50 million Hong Kong dollars, determined after fair negotiation based on the current market price of nearby properties of similar nature and age that can be compared by the company with China Aerospace Technology Corporation (Hong Kong). Due to property market fluctuations, the company will appoint an independent valuer to determine the fair value of the property close to the date of publication. If the valuation report indicates a higher value for the property than the sale price, the company will renegotiate the sale price with China Aerospace Technology Corporation (Hong Kong). The sale provides the company with a rare opportunity to cash in on its aviation piston engine business. Since its listing on the Main Board of the Stock Exchange in 1991, the company has not raised any capital through the issuance of shares or other securities due to low trading liquidity. The company does not expect a significant improvement in prospects for equity financing in the short term. Therefore, the company's current listing status on the Stock Exchange may not provide any meaningful benefit in raising funds to support continued investment, enabling the company's operation to achieve a level that can bring significant returns to the company and shareholders. Thus, from a business perspective, the company expects to generate unaudited proceeds from the sale of approximately 1.4 billion Hong Kong dollars after completion of the sale, allowing the company to unlock the investment value in its business and provide an immediate opportunity for shareholders to cash in their shares.