Chongqing Iron & Steel to issue shares, targets RMB1 bn from Hwabao Investment

Chongqing Iron & Steel Company Limited announced its plan to issue A shares to Hwabao Investment, a wholly-owned subsidiary of China Baowu, in a related-party transaction. Hwabao Investment intends to subscribe for RMB1,000,000,000 at RMB1.32 per share, representing 90% of the average trading price over the 20 trading days prior to the pricing benchmark date of December 19, 2025. This issuance is expected to involve 757,575,757 shares, not exceeding 30% of the company's pre-issuance share capital.

The proceeds, after deducting issuance expenses, will be used to supplement working capital and repay bank loans. This move is aimed at optimizing the company's capital structure, increasing total assets and net assets, and reducing the asset-liability ratio. Upon completion, China Baowu and its acting-in-concert parties' combined shareholding is projected to be 35.07%, maintaining China Baowu as the actual controlling party.

The issuance is subject to multiple approvals, including shareholders' and class shareholders' meetings, an exemption from mandatory general offer obligations, approval from China Baowu, and registration with the CSRC. Newly issued shares will be subject to a 36-month lock-up period for Hwabao Investment, with prior holdings locked up for eighteen months.