Flower Year Holdings (01777) entered into a restructuring agreement with Splendid Fortune to sell 409 million shares of Lottery Life for US$4,5284 million

Zhitong Finance App News, Huayangnian Holdings (01777) issued an announcement. The company, TFISF and the buyer Splendid Fortune Enterprise Limited entered into a restructuring agreement on January 2, 2026. According to this, each contracting party conditionally agreed to carry out a series of parallel transactions involving the buyer's acquisition of sales shares (409 million shares of Lottery Life) at a price of HK$0.087 per share of the shares of Lottery Life (a subsidiary of the Company) of HK$0.087 per share of the shares issued by Lottery Life (a subsidiary of the Company) %).

TFISF appropriation price (that is, proceeds from sale of shares); transfer of TFISF shares (accounting for approximately 10.0% of the issued shares of Lottery Life on the date of this announcement) to a TFISF designated entity as effective execution of the alleged guarantee; deducting the cost of the alleged debt and the value of the agreed shares, thereby reducing the total debt payable to TFISF to a net difference.

The Company retains shares of the Company (accounting for approximately 9.98% of the issued shares of Color Life as of the date of this announcement), which are not subject to the alleged guarantee or any other claim, and have been fully relieved and excused; and (provided that the restructuring conditions are reached or exempted from completion of the final deadline) by Sky Ease, a subsidiary of the Company, on the basis of no recourse against pledgers under share pledges (that is, the same as existing guarantees) and companies whose shares will be limited by the share pledge) on the basis of no recourse debt.

As far as the restructuring agreement is concerned, the value of each share of Lottery Life shares is HK$0.087, a discount of approximately 48.82% from the closing price of HK$0.17 reported on the Stock Exchange on the date of the restructuring agreement. The total cost of the sale of shares, calculated at HK$0.087 per share sold, was US$4,5284 million.

Depending on the final review, the Group is expected to have a net loss of approximately RMB 1,409 million. This amount is calculated by reference to the sale price (accounting for approximately 21.97% of the shares issued by Lottery Life on the date of this announcement), the transfer of TFISF shares to a TFISF designated entity as effective execution of the alleged guarantee (accounting for about 10.0% of the shares issued by Lottery Life on the date of this announcement), and the net asset value of Lottery Life.

Proceeds from sale of shares (that is, costs) will be used by TFISF to reduce the company's risk exposure to TFISF. The Company will not collect any cash payments as a result of other transactions proposed under the restructuring agreement (including but not limited to the transfer of TFISF shares, debt replacement, and new liabilities to TFISF designated entities).

After completing the sale of shares, Lottery Life will no longer be a subsidiary of the Company. Following the sale of shares and transfer of TFISF shares to TFISF designated entities, on the date of this announcement, the Company will retain 186 million shares of Lottery Life shares (without the alleged guarantees), accounting for approximately 9.98% of the number of shares issued by Lottery Life.

Before signing the restructuring agreement, the board of directors has considered a number of factors, including: the contracting parties' efforts to resolve the dispute so far; the opinions provided by the Company's legal advisors on the likely outcome of the dispute; the insufficient intention of Color Life Co., Ltd. in the tender; the current market conditions and climate of the Chinese real estate industry; the Company's implementation of the proposed debt restructuring plan; and failure to implement the proposed debt restructuring as scheduled may have a significant adverse impact on the Company, which in turn affects shareholders' rights and interests.