China Shenhua plans to raise 20 billion yuan to replace 83.5 billion yuan of previously invested self-raised funds.

(The China News Service) China Shenhua Energy Co., Ltd. (Stock code: 601088, Stock abbreviation: China Shenhua) released an announcement on March 31, stating its plan to use proceeds from the issuance to replace previously invested self-raised funds. The company’s board of directors has approved the relevant resolution, agreeing to use the net proceeds from this issuance of RMB 19.967 billion to fully replace the self-raised funds invested in the prior period.

Basic Information on the Proceeds from the Fundraising

According to the approval reply issued by the China Securities Regulatory Commission on February 11, 2026, China Shenhua will issue 458 million shares of A-share ordinary stock to specific targets in this round of issuance at an issue price of RMB 43.70 per share, raising total proceeds of approximately RMB 20 billion. After deducting issuance costs of RMB 32.5072 million, the net proceeds amount to RMB 19.967 billion. The added registered capital from this issuance has been verified by Ernst & Young Hua Ming LLP, which issued a capital verification report.

To standardize the management of proceeds from the fundraising, the company has opened special accounts for the proceeds and signed a “Three-Party Regulatory Agreement on the Storage of Special Accounts for Proceeds from the Fundraising” with the independent financial advisor and the account-opening bank, implementing special-account deposit management.

Prepaid Self-Raised Funds

The announcement shows that, before the proceeds from the supporting fundraising were in place, the company had, based on the transaction implementation progress and funding requirements, prepaid cash consideration of RMB 83.5 billion to the State Power Investment Group with self-raised funds in advance. This amount exceeds the net proceeds from the current fundraising of RMB 19.967 billion.

The company states that this replacement of proceeds from the fundraising is in compliance with the “Proceeds from Fundraising Supervision and Management Rules for Listed Companies,” the “Guidelines for Self-Regulatory Supervision No. 1—Standardized Operations of Listed Companies on the Shanghai Stock Exchange,” and other relevant regulations. There is no situation involving any disguised change in the intended use of the proceeds from fundraising or any harm to the interests of shareholders. Moreover, the timing of the replacement is not more than 6 months from the time the proceeds from fundraising were credited.

Approval Procedures and Special Opinions

China Shenhua convened the 17th meeting of the sixth session of the board of directors on March 30, 2026, and approved the resolution titled “Resolution on Using Proceeds from Fundraising to Replace Self-Raised Funds Invested in Advance.”

In the verification report issued by Ernst & Young Hua Ming LLP, it is concluded that the report on the company’s self-raised funds invested in advance in the projects under the fund-raising plan was prepared in accordance with the relevant requirements in all material respects and truthfully reflects the pre-investment situation. The independent financial advisor also issued a review opinion, stating that this replacement matter has fulfilled the necessary decision-making procedures and complies with the requirements of relevant laws and regulations, and has no objection to the matter.

After the completion of this replacement of proceeds from fundraising, it will further optimize the company’s capital structure, improve the efficiency of capital utilization, and support the smooth advancement of the company’s restructuring projects.

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