Magnus Concordia Group sells subsidiary to boost finances, exit China property

Magnus Concordia Group Ltd (HKEX:1172) has agreed to dispose of its entire equity interest in Jinjin Investments Co., Limited for HK$4,000,000. This major transaction aims to reduce the Group's exposure to the volatile PRC real estate market and reallocate resources. The consideration will be paid via an offset of a HK$3,600,000 refundable deposit and a cash payment of HK$400,000 at completion.

The subsidiary's principal asset is a property in Zigong City, Sichuan Province, which contributed approximately RMB3,736 million in accumulated revenue to the Group between acquisition and March 31, 2025. However, the subsidiary reported net losses of HK$26.2 million and HK$40.1 million for the years ended March 31, 2025, and March 31, 2024, respectively. Post-disposal, Magnus Concordia Group expects to recognize an estimated gain of approximately HK$145.2 million and a HK$125.4 million increase in net assets for the remaining Group.

This disposal is part of broader action plans to address a "Disclaimer of Opinion" from the auditor regarding the Group's going concern ability. Other measures include repaying HK$12 million in borrowings, exploring a factoring loan facility, considering disposals of Hong Kong investment properties, controlling operating costs by reducing headcount, and exploring fund-raising options like new share placements and convertible bonds. An EGM will be convened for shareholders to approve the transaction.