SH ELECTRIC (02727.HK): Wins first-instance judgment in loan recovery against China Energy, awarded over RMB 204 million

NewTimeSpace News: On 1 September 2026, Shanghai Electric Group Company Limited (stock code: 02727) issued an announcement on the progress of a material litigation. The Company provided loans totalling RMB 1 billion to China Energy Engineering Group Co., Ltd. in 2019 and 2020; after the borrower repaid RMB 1 million of principal and part of the interest, it failed to perform its contractual obligations, and the Company filed a lawsuit with the Shanghai Financial Court. On 29 September 2024, the Company signed a settlement agreement with the defendant Shanghai Pufa Machinery Industry Co., Ltd. and its wholly-owned subsidiary Shanghai Pujin Enterprise Development Co., Ltd., reaching a settlement on the repayment of the principal debt, and that litigation was concluded. In August 2025, the Company pursued recovery of the remaining debt against China Energy and the guarantors, including Shanghai Zhongyou Guodian Energy Co., Ltd., Shanghai Changtai Electric Co., Ltd. and China Machinery Guoneng Engineering Co., Ltd., and filed Litigation 1 and Litigation 2 with the Shanghai Pudong New Area People's Court.

The Company recently received the first-instance judgment in Litigation 1, which ordered China Energy to repay loan interest of RMB 29,354,602.19 and default interest of RMB 160,747,265.25 within ten days of the judgment taking effect, to pay compound interest of RMB 14,172,233.40 as of 7 August 2026 and compound interest from 8 August 2026 until the date of actual repayment (calculated at an annual rate of 8.3655%), and to compensate the Company for lawyer's fees of RMB 150,000. If China Energy fails to perform the payment obligations, the Company may agree to convert the pledged equity at a discounted price or apply to obtain priority repayment from the proceeds of auction or sale of such equity. The remaining claims of the Company were dismissed. Court acceptance fees and preservation fees totalling RMB 1,063,438 are to be borne jointly by China Energy and Zhongyou Guodian. As of the date of this announcement, the Company has not yet received the judgment in Litigation 2.

The Company noted that this is a first-instance judgment in Litigation 1, which has not yet become effective as the defendants may appeal within the prescribed period, and given the uncertainty of the final judgment and enforcement results, the impact on the Company's current or subsequent profits remains uncertain; the Company will make corresponding accounting treatments in accordance with applicable accounting standards and the actual circumstances, and will perform its information disclosure obligations in a timely manner.

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