Jilin Heating amends acquisition deal, terminates land purchase over ownership issues

Jilin Province Chuncheng Heating Company Limited entered a compensation agreement on October 21, 2025, with Changre Group. This agreement addresses Changre Group's breach of the original Assets Transfer Agreement, specifically its failure to deliver the Target Land with proper property ownership. As a result, the acquisition of the Target Land by the company from Changre Group has been terminated.

Under the revised Compensation Arrangement, the company will proceed with the acquisition of Target Assets I (excluding the Target Land), committing to pay RMB48,850,355.65 for machinery and equipment for heat production. The company will not be liable for the RMB65,079,666 consideration previously allocated for the Target Land. Additionally, Changre Group will grant the company a three-year right of use for the Target Land, enabling it to continue utilizing existing infrastructure for the 2025–2026 heat supply period.

The board of directors, excluding Mr. Song Chi, views the Compensation Arrangement as fair and reasonable, and in the best interests of the company and its shareholders. This decision ensures the group can continue its heat production operations without monetary loss from the breach, as the company had not yet paid for the land.