Hesteel injects 4.7 bn yuan into subsidiary Laogang, boosts ownership

Hesteel Co., Ltd. announced a 4.7 billion yuan cash injection into its controlled subsidiary, Hebei Iron & Steel Laoting Steel Co., Ltd. (Laogang). This capital increase will raise Laogang's registered capital from 17,477.11 million yuan to 21,272.31 million yuan, increasing Hesteel's ownership from 75.91% to 80.21%. The Transformation Fund, a connected party, maintains its 4,210.22 million yuan stake, diluting its share to 19.79%. The transaction is based on Laogang's net asset valuation as of June 30, 2025, and aims to optimize Laogang's financial structure.

The capital increase is classified as a connected transaction due to the Transformation Fund's relationship with Hesteel Group Co., Ltd., Hesteel's indirect controlling shareholder. The 4.7 billion yuan transaction represents 8.07% of Hesteel's latest audited net assets and requires approval from the company's shareholders' meeting. Hesteel's board also approved the 2026 daily related transaction forecast of 150,300,818,700 yuan, covering procurement and sales of products and services with connected parties.

The board meeting, held on December 12, 2025, approved both the capital increase and the 2026 related transaction forecast. Directors with conflicts of interest recused themselves from voting. The shareholder meeting for these approvals is scheduled for December 29, 2025.