On December 23rd, Gloron announced that FIRST SERVICE (02107.HK) entered into a netting agreement with MODERN LAND Group on December 23rd, 2024, according to which the group's member companies agreed to settle the outstanding receivables owed to them by MODERN LAND Group primarily through the transfer of certain properties.

MODERN LAND was previously able to fulfill its payment obligations according to the terms of the relevant individual agreements. However, starting in 2024, there have been delays in the settlement of receivables, which the group understands is mainly due to adverse impacts from various factors such as the macroeconomic environment, the Real Estate Industry environment, and the COVID-19 pandemic. As of June 30th, 2024, the total outstanding receivables of MODERN LAND and its subsidiaries amounted to RMB 123,934,000.00, of which the total outstanding receivables amounted to RMB 9,056,623.67, originating from property management services that the group's member companies previously provided to MODERN LAND Group.

After continuous communication and follow-up with MODERN LAND and exploring different measures to recover the outstanding receivables, both parties agreed to transfer the properties to the group's member companies to settle the outstanding receivables owed by MODERN LAND Group. The group intends to Hold these properties for investment purposes. The group is exploring other options to recover the remaining outstanding receivables from MODERN LAND and its subsidiaries.

The Directors believe that the transactions under the netting agreement are conducted on general commercial terms, and the terms are fair and reasonable. Although the transactions under the netting agreement are not carried out in the ordinary course of the group's daily and general business, they align with the overall interests of the group and the Shareholders.