We attach herewith the announcement made to The Stock Exchange of Hong Kong Limited ("The HKEx") on 31 October 2025 by Parkson Retail Group Limited ("PRGL"), a 54.97% owned subsidiary of Parkson Holdings Berhad ("PHB" or the "Company") listed on The HKEx, in relation to the termination of tenancy agreement in respect of a property in Guiyang City, Guizhou Province, the People’s Republic of China ("PRC").
On 31 October 2025, PRGL had announced that Guizhou Shenqi Parkson Retail Development Co., Ltd. ("Sub-Tenant"), an indirect 60% owned subsidiary of PRGL, had entered into a tenancy termination agreement on even date with Guizhou Longgang Commercial Operation Management Co., Ltd. ("Tenant A"), an indirect wholly-owned subsidiary of Guizhou Shenqi Enterprise Co., Ltd. ("Guizhou Shenqi Enterprise"), and Guizhou Yuncui Property Management Co., Ltd. to terminate the Tenancy Agreement dated 29 March 2024 in respect of the sub-lease of Basement Level 1, and Level 1 to Level 4 in Longgang International Center, 117 Zhonghua Middle Road, Guiyang City, Guizhou Province, the PRC ("Property"), with effect from 30 November 2025 ("Tenancy Termination Agreement").
Pursuant to the International Financial Reporting Standard 16 - Leases ("IFRS 16") issued by the International Accounting Standards Board, the entering into of the Tenancy Termination Agreement as a sub-tenant will require the PRGL Group to derecognise the Property as a right-of-use asset for which the amount is approximately Rmb51.2 million (equivalent to approximately RM30.2 million). Thus, the entering into of the Tenancy Termination Agreement and the transactions contemplated thereunder will be regarded as a disposal of asset by the PRGL Group under the Rules Governing the Listing of Securities on The HKEx ("Listing Rules") ("Derecognition of Asset").
For the purpose of this announcement, an exchange rate of Rmb1.00: RM0.59 is assumed.
As all applicable percentage ratios under Rule 14.07 of the Listing Rules in respect of the transactions contemplated under the Tenancy Termination Agreement based on the value of the right-of-use asset to be derecognised by the PRGL Group pursuant to IFRS 16 are less than 5%, the entering into of the Tenancy Termination Agreement does not constitute a notifiable transaction of PRGL under Chapter 14 of the Listing Rules.
As all applicable percentage ratios under Rule 14A.09(1) of the Listing Rules in respect of the Sub-Tenant compared with that of the PRGL Group for the financial year ended 31 December 2024 are less than 5%, the Sub-Tenant is an insignificant subsidiary of PRGL.
Notwithstanding Tenant A is indirectly wholly-owned by Guizhou Shenqi Enterprise, a substantial shareholder holding the remaining 40% equity interest in the Sub-Tenant; Guizhou Shenqi Enterprise and Tenant A are not regarded as connected persons of PRGL pursuant to Rule 14A.09 of the Listing Rules as the Sub-Tenant is an insignificant subsidiary of PRGL. Therefore, the entering into of the Tenancy Termination Agreement does not constitute a connected transaction of PRGL under Chapter 14A of the Listing Rules.
The Derecognition of Asset does not have a material impact on the earnings of the PHB Group for the financial year ending 31 December 2025 and the net assets of the PHB Group based on the audited consolidated statement of financial position of the Company as at 31 December 2024.