Integrated Waste Solutions Group Holdings Limited Announces Possible Major Transaction: New Tenancy Agreement

Key Highlights of the Report

• Integrated Waste Solutions Group Holdings Limited (IWSGHL) is set to sign a significant Tenancy Agreement for new premises in Sheung Shui, Hong Kong, marking a strategic relocation of its operations.
• The Tenancy Agreement, when executed, will constitute a major transaction under Chapter 14 of the Hong Kong Listing Rules, due to the asset acquisition exceeding 25% of the relevant ratios.
• The new lease involves a right-of-use asset valued at approximately HK\$45,241,000, recognized under IFRS 16.
• The monthly rent for the new premises is HK\$880,000 inclusive of rates and management fees, with a rent-free period from 1 April 2026 to 31 May 2026.
• CMDSL (Confidential Materials Destruction Service Limited), an indirect wholly owned subsidiary of the Company, will be the tenant.
• The landlord, Strathgeath Investment Limited, and its ultimate beneficial owners are independent third parties.
• The Group will relocate to the new premises upon surrendering its existing lease with HKSTP (Hong Kong Science and Technology Parks Corporation) in Tseung Kwan O.
• A circular with further details will be sent to shareholders on or before 30 March 2026.
• The Company has arranged an unsecured, interest-bearing loan from CTF Nominee (a controlling shareholder) to fund relocation and renovation costs. This is a connected transaction but fully exempt under Listing Rules.

Important Information for Shareholders

• The transaction is considered major and will require shareholder approval. However, written approval from major shareholders (CTF Nominee, Smart On, and Prestige Safe, representing 56.86% of shares) is expected to allow the Company to dispense with a general meeting.
• No shareholder is required to abstain from voting, as neither the landlord nor its associates hold any shares in the Company.
• The relocation and new lease may impact the Company’s future operations, costs, and asset base, which could be price sensitive and affect share values, especially given the substantial lease value and relocation expense.
• Shareholders and potential investors are advised to exercise caution when dealing in Company securities, as the new lease may or may not be obtained depending on compliance with Listing Rules.
• The Company will comply with all Listing Rule requirements for renewal options if exercised.
• The loan from CTF Nominee is on normal commercial terms and is unsecured, mitigating risk on financing relocation.

Detailed Terms of the Tenancy Agreement

• Premises: Units B1 – B23, Ground Floor, Jumbo Plaza, No. 6 Choi Fai Street, Sheung Shui, New Territories, Hong Kong.
• Floor Area: Approximately 62,120 square feet, designated for industrial and lawful uses per government grant.
• Term: Three years, from 1 April 2026 to 31 March 2029, with a two-year renewal option at market rent if notice is given three months before expiry and all terms are complied with.
• Rent: HK\$880,000 per calendar month, paid monthly in advance, funded by internal resources. Rent-free period from 1 April 2026 to 31 May 2026 (rates, government rent, management fee, and other charges still payable during rent-free period).
• Deposit: HK\$1,760,000, refundable within 30 days after lease termination and return of vacant possession, subject to no arrears or breaches.
• No Alienation: CMDSL cannot assign, sublet, or part with possession of the premises except for use by the Group for principal activities. If CMDSL ceases to be a subsidiary, prohibitions immediately apply.
• Default Conditions: Landlord may determine the agreement and re-enter premises if rent unpaid for 15 days, breach of terms, bankruptcy, or liquidation occurs.

Strategic Reasons and Benefits

• The Group is engaged in trading recovered paper/materials, confidential materials destruction, logistics services, and has interests in waste recycling and supply chain management projects in Hong Kong and Guangdong.
• The relocation follows the surrender of the existing lease with HKSTP (approved by shareholders in September 2025), and is considered more suitable for business continuity and overall Group operations.
• The Directors, including independent non-executive directors, consider the terms (including monthly rent) to be fair, reasonable, and in the interests of the Company and shareholders.

Implications for Investors

• The recognition of the new lease as a right-of-use asset and the surrender of the previous premises represent substantial changes in the Company’s asset base and operational footprint.
• These developments may impact future financials, operating costs, and overall business strategy, which are potentially price sensitive.
• The transaction’s classification as a major transaction signals its importance and potential to move share prices.
• Further announcements will be made regarding written approvals from major shareholders and completion of the transaction.
• A circular with comprehensive details will be sent to shareholders before 30 March 2026.

Disclaimer

This article is based on public disclosures by Integrated Waste Solutions Group Holdings Limited and is intended for informational purposes only. It does not constitute financial advice or a recommendation to buy or sell securities. Investors should exercise caution and consult their financial advisors before making investment decisions. The Company’s plans and the Tenancy Agreement are subject to compliance with regulatory requirements and may not proceed as described.

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