Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
MILAN STATION HOLDINGS LIMITED
米 蘭 站 控 股 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 1150)
DISCLOSEABLE TRANSACTION -
RENEWAL OF THE LEASE AGREEMENT
RENEWAL OF THE LEASE AGREEMENT
The Board announces that on 4 August 2020, Milan KT, an indirectly wholly-owned subsidiary of the Company, as Lessee, agreed and finalised the terms of the New Lease Agreement with Garudia Limited and Lunalite Company Limited, both are Independent Third Party, as Lessor, to renew the existing lease in respect of the Premises where Milan KT agreed to lease from Garudia Limited and Lunalite Company Limited commencing from 1 July 2020 to 30 June 2023 for retail use. (both days inclusive)
IMPLICATIONS OF THE LISTING RULES
Pursuant to HKFRS 16, as a result of the renewal of the lease agreement, the Group shall recognise the right-of-use asset in the consolidated financial statements of the Company, and the transaction contemplated thereunder will be regarded as an acquisition of asset by the Group in accordance with the Rule 14.04(1)(a) of the Listing Rules.
As the applicable percentage ratio (as defined under Rule 14.04(9) of the Listing Rules) in respect of the New Lease Agreement based on the value of the right-of-use asset recognised by the Group pursuant to HKFRS 16 exceeds 5% but less than 25%, the transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is accordingly subject to the reporting and announcement requirements but is exempted from shareholders' approval requirement.
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THE NEW LEASE AGREEMENT
The Board announces that on 4 August 2020, Milan KT, as Lessee, entered into the New Lease Agreement with Garudia Limited and Lunalite Company Limited, as lessor, the particulars of which are set out below:
Date: | 4 August 2020 |
Lessee: | Milan KT, a indirectly wholly-owned subsidiary of the Company |
Lessor: | Garudia Limited and Gunalite Company Limited, both are Independent |
Third Party | |
To the best of the Director's knowledge, information and belief, and | |
having made all reasonable enquiries, the Lessor is owned by Sun Hung | |
Kai Properties Limited, a leading property developer in Hong Kong and | |
the Lessor and its ultimate beneficial owner(s) are Independent Third | |
Parties | |
Location: | Shop No. UC-8 on Upper Concourse Level of the Lower Commercial |
Accommodation (now known as "apm"), Millennium City 5, No. 418 | |
Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong | |
Term: | Three (3) years commencing from 1 July 2020 to 31 June 2023. |
Principal terms: | Garudia Limited and Gunalite Company Limited will lease the Premises |
to Milan KT for retail use. | |
Monthly rent: | Monthly rent of HK$108,600 from 1 July 2020 to 30 June 2021 |
and HK$114,000 from 1 July 2021 to 30 June 2023 (exclusive of | |
government rent, government rates and management fees). | |
Addition Turnover | 3.5% of the gross amount of all sums billed or received in the course |
Rent: | of Milan KT's business at the said Premises during and for the rental |
payable month exceeds the monthly rent. | |
Total consideration | The total consideration payable under the New Lease Agreement |
payable: | including rent, service and management charges by the Lessee is |
approximately HK$4 million | |
Deposit: | HK$743,476 |
The terms (including the rent and management fee) of the New Lease Agreement were determined after arm's length negotiations between the Lessor and Lessee and with reference to the prevailing market rental for properties of similar type, age and location.
The rent is expected to be funded through the internal resources of the Group.
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REASONS FOR AND BENEFITS OF THE NEW LEASE AGREEMENT
The Group is principally engaged in the retail of handbags, fashion accessories, embellishments and spa and wellness products in Hong Kong under the brand names of "Milan Station" and "THANN". The Group currently operates "Milan Station" retail stores and the "THANN" retail stores in Hong Kong as at the date of this announcement. The Board considered that entering into of the New Lease Agreement is in the interest of the Group to secure its profitability.
In addition, the terms (including the rent and management fee) of the New Lease Agreement were determined after arm's length negotiations between the Lessor and Lessee and with reference to the prevailing market rental for properties of similar type, age and location. The Directors consider that the terms of the New Lease Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole.
INFORMATION OF THE PARTIES
The Company was incorporated in the Cayman Islands with limited liability whose shares are listed on the Main Board of the Stock Exchange. Milan KT, as Lessee, is principally engaged in the retailing of handbags, fashion accessories and embellishments and spa and wellness products and is an indirectly wholly-owned subsidiary of the Company.
Garudia Limited and Lunalite Company Limited, as Lessor, is primarily engaged in property investment. To the best of the Director's knowledge, information and belief, and having made all reasonable enquiries, the Lessor is owned by Sun Hung Kai Properties Limited, a leading property developer in Hong Kong and the Lessor and its ultimate beneficial owner(s) are Independent Third Parties.
IMPLICATIONS OF THE LISTING RULES
Pursuant to HKFRS 16, as a result of the renewal of the lease agreement, the Group shall recognise an additional asset representing its right to use the Premises. As such, the transaction will be regarded as an acquisition of asset by the Group under the definition of transaction set out in Rule 14.04(1)(a) of the Listing Rules. Based on preliminary estimation of the Company, the value of the right-of-use asset to be recognised by the Company under the New Lease Agreement shall amount to approximately HK$4 million, which is the present value of aggregated lease payments, plus initial direct costs and estimated reinstatement cost with the lease in accordance with HKFRS 16. Discount rate is equivalent to the Company's incremental borrowing rate during the entire term of the New Lease Agreement, is applied to compute the present value of aggregate lease payments under the New Lease Agreement.
As the applicable percentage ratio (as defined under Rule 14.04(9) of the Listing Rules) in respect of the New Lease Agreement based on the value of the right-of-use asset recognised by the Group pursuant to HKFRS 16 exceeds 5% but less than 25%, the transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is accordingly subject to the reporting and announcement requirements but is exempted from shareholders' approval requirement.
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DEFINITIONS
In this announcement, unless the context otherwise requires, the following terms have the following respective meanings:
"Board"
"Company"
the board of Directors
Milan Station Holdings Limited（米蘭站控股有限公司）, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
"Director(s)"
"Group"
"HK$"
"HKFRS 16"
"Hong Kong" or "HK"
"Independent Third Party(ies)"
the director(s) of the Company
the Company and its subsidiaries
Hong Kong dollars, the lawful currency of Hong Kong
Hong Kong Financial Reporting Standard 16 "Leases" issued by the Hong Kong Institute of Certified Public Accountants
the Hong Kong Special Administrative Region of the PRC
any person(s) or company(ies) and their respective ultimate beneficial owner, to the best of the Directors' knowledge, information and belief having made all reasonable enquires, is/are not connected persons of the Company and is/are third party independent of the Company and its connected persons in accordance with the Listing Rules
"Lessee"
"Lessor"
"Listing Rules"
"Main Board"
Milan KT, an indirectly wholly-owned subsidiary of the Company
Garudia Limited and Lunalite Company Limited, both are Independent Third Party
the Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to time)
the stock market operated by the Stock Exchange prior to the establishment of the Growth Enterprise Market of the Stock Exchange (excluding the option market) and which stock market continues to be operated by the Stock Exchange in parallel with the Growth Enterprise Market of the Stock Exchange (for avoidance of doubt, the Main Board excludes the Growth Enterprise Market)
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"Milan KT"
"New Lease Agreement"
"Premises"
"Stock Exchange"
"%"
Hong Kong, 4 August 2020
Milan Station (Kwun Tong) Limited（米蘭站（觀塘）有限 公司）, a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company
the lease agreement in relation to the Premises, the principal terms of which are set out in the section headed "RENEWAL OF THE LEASE AGREEMENT" in this announcement
the premises situated at Shop No. UC-8 on Upper Concourse Level of the Lower Commercial Accommodation (now known as "apm"), Millennium City 5, No. 418 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong
The Stock Exchange of Hong Kong Limited
per cent.
By Order of the Board
Milan Station Holdings Limited
Hu Bo
Director
As at the date of this announcement, the Board comprises Mr. HU Bo and Mr. LI Zhongqi as Executive Directors; Mr. CHAN Chi Hung, Mr. TOU Kin Chuen and Mr. Choi Kam Yan Simon as Independent Non-executive Directors.
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