SHANGHAI IND H (00363) subsidiary intends to implement REITs-like asset-backed securitization for Wuxi property through a special plan.

SHANGHAI IND H (00363) announces that its non-wholly-owned subsidiary Shanghai Industrial Urban Development (SIUD) intends to implement REITs-like asset-backed securitization for the property through a special plan, aiming to realize the value of the Group's existing property assets, generate cash proceeds, optimize the capital structure and lower the net gearing ratio. The special plan is expected to raise approximately RMB1.196 billion from investors through the issuance of approximately RMB1.077 billion of senior asset-backed securities and approximately RMB119 million of subordinated asset-backed securities. The property, lawfully owned and operated by the target company (Shanghai Urban Development (Group) Wuxi Real Estate Co., Ltd.), will become the underlying asset of the special plan. The property is a landmark twin-tower complex located in Wuxi, China, with a total gross floor area of approximately 147,100 sq.m., comprising Crowne Plaza Wuxi Taihu, Holiday Inn Express Wuxi Taihu, Grade-A office space, commercial ancillary facilities and apartments. The net operating income generated by the property (including rent, hotel turnover and other operating cash flows) will be injected into the special plan. As one of the implementation steps of the special plan, on October 20, 2026, Shanghai Urban Development (as a subsidiary 59%-owned by SIUD and an indirect subsidiary of the Company) entered into an equity transfer agreement with the plan manager acting on behalf of the special plan. Pursuant to the equity transfer agreement, Shanghai Urban Development agreed to sell, and the plan manager (acting on behalf of the special plan) agreed to acquire, the entire equity interest in the target company (which holds the property) for a cash consideration of RMB396 million. The special plan (through the plan manager) will also provide a new loan of RMB800 million to the target company, which will be used in full to repay the RMB800 million shareholder loan owed by the target company to Shanghai Urban Development. Upon completion of the equity transfer agreement, Shanghai Urban Development will no longer hold any equity interest in the target company, and the special plan will wholly own the target company. The target company will cease to be a subsidiary of SIUD, and its financial results will no longer be consolidated into the financial statements of the Group. In addition, Shanghai Urban Development will carry out the subscription, with a total subscription amount of not more than RMB30 million, equivalent to approximately 25% of the subordinated asset-backed securities and approximately 2.5% of the total issuance size of the special plan. Apart from the subscription, all asset-backed securities are expected to be placed with independent third-party investors. Shanghai Urban Development will also provide liquidity support, and Shanghai Urban Development (or its designated entity) will be granted a right of first refusal.