SHIMAO GROUP (00813) has agreed to convert RMB379.00 million in principal and RMB40.75 million in accrued interest under its 5.5% medium-term notes “21 Shanghai Shimao MTN002” into equity, issuing 71.54 million new shares to three mainland creditors at HK$6.00 per share.

The transaction—executed through two debt-settlement agreements dated 15 May 2026—will see Xiamen Yuandi Business Management, Xiamen Houjin Brand Planning and Shanghai Deji Investment Management receive 25.74 million, 10.12 million and 35.68 million shares respectively. Completion remains subject to Hong Kong Stock Exchange listing approval, with a long-stop date of 15 June 2026.

Key terms

1. Conversion size and pricing • Aggregate shares: 71.54 million (nominal value: HK$7.15 million) • Issue price: HK$6.00, matching the price set in the company’s March 2025 offshore-debt restructuring • Premiums: 3,770.97% to the 15 May 2026 closing price (HK$0.155) and 3,659.40% to the five-day average (HK$0.1596)

2. Dilution impact • Pre-deal share base: 9.74 billion • Post-deal share base: 9.82 billion • New shares represent 0.734% of existing and 0.729% of enlarged capital • Controlling shareholder stake falls from 30.19% to 29.97%; none of the three creditors will become substantial shareholders

3. Mandate and listing • Shares will be issued under the unused general mandate (20% of issued capital) obtained on 12 June 2025; 688.03 million shares remain available post-issuance • Capitalisation shares will rank pari passu with existing shares and are not subject to lock-up

Rationale

The conversion will discharge approximately RMB419.76 million of outstanding obligations, lowering leverage without cash outlay and improving the group’s balance-sheet position. The company has undertaken no other equity fundraising in the past 12 months.

Completion is expected on the fifth business day after listing approval. Shareholders and investors are advised that the transaction may not proceed if conditions precedent are not met.