We attach herewith the announcement made to The Stock Exchange of Hong Kong Limited ("The HKEx") on 8 December 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 major transaction on the supplemental agreement to tenancy agreement in respect of property in Hefei City, Anhui Province, the People’s Republic of China ("PRC").
On 8 December 2025, PRGL had announced that Hefei Parkson Xiaoyao Plaza Co., Ltd., an indirect wholly-owned subsidiary of PRGL, had on even date entered into a supplemental agreement to the original tenancy agreement with Hefei Xingtai Equity Investment Management Co., Ltd. in respect of the renewal of the tenancy of the relevant parts of (i) Level LG1 to Level 5 of the North Building of Xiaoyao Plaza, Huaihe Road; and (ii) Level 3 and Level 4 of the South Building of Vegetable Market Complex, No. 45 Jiushiqiao Road, both in Hefei City, Anhui Province, the PRC (collectively, the "Hefei Property") for a term of 6 years from 1 March 2028 up to 28 February 2034 ("Supplemental Agreement").
Pursuant to the International Financial Reporting Standard 16 - Leases ("IFRS 16") issued by the International Accounting Standards Board, the PRGL Group is required to recognise the Hefei Property as a right-of-use asset. Thus, the entering into of the Supplemental Agreement and the transactions contemplated thereunder will be regarded as an acquisition of asset by the PRGL Group under the Rules Governing the Listing of Securities on The HKEx ("Listing Rules") ("Acquisition of Asset"). The consideration for the Acquisition of Asset recognised by the PRGL Group pursuant to IFRS 16 is approximately Rmb157.2 million (equivalent to approximately RM91.2 million), which is calculated based on the present value of the rent payments to be made under the Supplemental Agreement in accordance with IFRS 16.
For the purpose of this announcement, an exchange rate of Rmb1.00: RM0.58 is assumed.
As the highest applicable percentage ratio under Rule 14.07 of the Listing Rules in respect of the consideration for the Acquisition of Asset recognised by the PRGL Group pursuant to IFRS 16 is more than 25% but less than 100%, the entering into of the Supplemental Agreement constitutes a major transaction for PRGL, and is therefore subject to announcement, circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules. In this regard, the written approval of a closely allied group of shareholders interested in an aggregate of 1,448,270,000 ordinary shares of HK$0.02 each, representing approximately 54.97% of the total number of issued shares of PRGL, on the entering into of the Supplemental Agreement and the transactions contemplated thereunder has been accepted in lieu of holding a general meeting of PRGL pursuant to Rule 14.44 of the Listing Rules.
The Acquisition 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.