The board of directors of the Okura Holdings Limited announced that its pachinko hall, K's Plaza Ohato hall located at 10-5, Motofuna-machi, Nagasaki City, Nagasaki Prefecture, Japanwill cease operations with effect from 14 January 2024. The management of the Company has decided to close down K's Plaza Ohato having duly considered its deteriorating operating and financial performance since the outbreak of the Coronavirus Disease 2019 in Japan in January 2020 and the resulting low overall customer traffic since early 2020. The management considered that although K's Plaza Ohato gradually managed to regain customer traffic in the year ended 30 June 2023, as compared with some of the Group's other pachinko halls, the recovery of customer traffic at K's Plaza Ohato is still at a slow pace despite the Group's continuous effort in promoting its pachinko and pachislot games in K's Plaza Ohato, and accordingly this pachinko hall continue to record losses from its business operations.

Taking into account the general adverse operating landscape, the intense competition in the pachinko industry and the increasing competition from other forms of entertainment in Japan, the management considered that it will be more beneficial for the Group to focus its resources on the Group's another pachinko hall, SENKURA Dejima (formerly known as Big Apple. Dejima) which is located close to K's Plaza Ohato, as well as other more promising pachinko halls by enhancing customer experience there and minimise further losses from business operations by closing down the pachinko hall with weaker performance. As the Land and the building erected on the Land (the ?Building?) are owned by the Group, the management is considering to lease out the Building after the close down of K's Plaza Ohato in order to generate rental income which can serve as the Group's stable source of cash flow and revenue.

The Directors believed that the streamlining of resources and operations by closing down K's Plaza Ohato and the potential leasing out of the Building will help stabilise and improve the Group's financial performance in the long run, and is in the best interests of the Group and the Shareholders as a whole.