According to Zhichun Finance APP, Gracewine (08146) announced that on December 5, 2024, the company intends to sell 100% of the issued share capital and the pending loans of Pacific Surplus to the chairman, CEO, executive director, and controlling shareholder Chen Fang, for a total of 71.28 million Hong Kong dollars and 38.88 million Hong Kong dollars, respectively.

The pending loans are interest-free loans provided by the company to Wanhao, which will become a wholly-owned subsidiary of Pacific Surplus after the completion of the restructuring of Fujian De Xi.

In addition, the board of directors proposed: (i) subject to the independent shareholders' approval of the resolution regarding the sale of Pacific Surplus and the completion of the transaction by Pacific Surplus, to declare, distribute, and pay a special dividend of 7.802 Hong Kong cents per share to shareholders; and (ii) subject to the independent shareholders' approval of the resolution regarding the sale of Epic Wealth and the completion of the transaction by Epic Wealth, to declare, distribute, and pay a special dividend of 4.256 Hong Kong cents per share to shareholders.

Considering the view of Zhaosheng Consulting regarding the slowdown and uncertainty in the prospects of the whiskey and gin industry, as well as the board of directors' agreement with the views of Zhaosheng Consulting based on its experience and industry knowledge about the development of the whiskey and gin industry; the distillery business failing to further support the operating capital needs of the distillery business; and despite the distillery business starting production and operations in the past year and the products potentially being launched only after mid-2026, the financing difficulties of the distillery business have led the directors to believe that selling the distillery business is beneficial for the group and shareholders overall.

After the completion of the sale of Epic Wealth, the group will continue to hold a 70% equity in the distillery business. The group has devoted significant resources to promote its brand, and the directors believe that due to its good value, the brand has gained recognition among consumers. In the long term, the directors remain confident in the prospects of the distillery business. In the short term, the sale of minority equity in the distillery business will help alleviate the group’s operating capital burden during market downturns.

It is reported that after the completion of the restructuring of Fujian De Xi, the Pacific Surplus Group will wholly own Fujian De Xi and primarily engage in the distillery business, including the production of whiskey through the Longyan Distillery located in Longyan City, Fujian Province, China, and the production and sale of gin products.

Epic Wealth is a limited company registered under the laws of the British Virgin Islands, wholly owned by the company. After the restructuring of Epic Wealth and the completion of the restructuring of Fuxian Deqi, the Epic Wealth Group mainly engages in the winery business, including the production and distribution of wine products, grape cultivation, and the sale of winemaking grapes.