Grand Ming Group Holdings Ltd (01271) revealed on September 18, 2026, that its two indirect wholly-owned subsidiaries, acting as sellers, have inked conditional agreements with a buyer for the disposal of properties designated as a data centre development project held for lease purposes.
The agreed minimum total consideration stands at HK$2.179 billion, with potential additional payments of up to HK$266 million, bringing the maximum total to HK$2.445 billion. The first two phases of Property 1 were already handed over to the buyer in December 2025, who currently occupies the space and generates rental income, while the remaining development and fitting-out works remain ongoing. Property 2 is under construction, intended for data centre use, and currently yields no rental revenue.
The board is actively pursuing every viable strategy to deleverage the group's balance sheet, bolster working capital, and secure long-term financial stability. This sale affords the group a chance to offload both properties to a single purchaser in one transaction, unlocking substantial cash proceeds that will reinforce its financial position, reduce overall debt, and lower financing costs alongside development risks, albeit subject to ongoing obligations under the agreements.
Since June 2025, the group had been exploring potential sale avenues, engaging various parties in non-binding processes without reaching any formal accord. Now, the buyer has committed to acquiring the properties under these terms. Although the two deliveries are not mutually conditional, transacting with one buyer cuts down on the time, execution risks, and duplicated costs tied to sourcing and negotiating with multiple parties, while streamlining due diligence, lender consents, repayments, and discharge of mortgages.
The payment framework permits each property to be transferred upon its delivery, with the minimum total consideration paid at that point; however, payments linked to specific remaining works are triggered only after post-delivery conditions are satisfied. This structure enables the sale to proceed before those works conclude, allowing the board to assess the merits without banking on receipt of the additional sums.
While the board weighed separate disposals or bundling the sale with two other group properties, it determined that the terms, timing, and execution certainty under this arrangement were more suitable and workable to address the group's funding needs. This decision factored in the close proximity of both properties, their technical design for joint operation, and the buyer's status as the current occupant of Property 1, whose consent would be mandatory for any third-party sale.
The board assessed the transaction on the assumption no further amounts would be received, including a minimum total consideration reflecting an approximate 19.0% discount to the initial valuation at completion stage, alongside an expected accounting loss of HK$1.088 billion. This loss primarily stems from proceeds falling below historical carrying values, which is not an independent cash payment at delivery. The board balanced this loss against the immediate application of net cash proceeds to cut debt, the financing costs and execution risks of a delayed sale, and the carrying costs and risks of continued ownership.
Anticipated annual financing cost savings from the planned repayments are roughly HK$136 million. The group's remaining works, transition arrangements, and other obligations principally involve specific fitting-out works mandated by the agreements. Estimated total costs for these designated fitting-out and construction works stand at about HK$118 million, of which approximately HK$72.5 million remains payable by the group to finish the tasks and meet related post-completion conditions. These estimates reference the amounts still owed under relevant subcontracts for executing the specified fitting-out works.
After weighing these factors, the outcomes of the buyer identification process, available alternatives, and the financing and mortgage discharge arrangements discussed, the board concluded that the sale's benefits outweigh the projected accounting loss and retained obligations, even without receipt of the additional payments.