CHINA SHENGMU-PF (01432.HK): Voting proxy granted to Modern Dairy partially lapses; severe public float shortfall

NewTimeSpace News: On 10 September 2026, China Modern Dairy Holdings Ltd. (stock code: 01117) and China Shengmu Organic Milk Limited (stock code: 01432) published a joint announcement disclosing the partial lapse of an irrevocable voting proxy granted by Start Great Holdings Limited to Modern Dairy in respect of certain China Shengmu shares.

According to the announcement, Modern Dairy, Start Great and Mengniu entered into a voting agreement under which Start Great irrevocably granted Modern Dairy a proxy to exercise the voting rights attached to 2,086,942,512 China Shengmu shares held by it, representing approximately 24.90% of the total issued share capital as at the date of the joint announcement. Under the terms of the agreement, upon the close of the offer, if Modern Dairy determines that the number of voting rights over the proxy shares exceeds the voting rights necessary for it to consolidate China Shengmu as a subsidiary in its consolidated financial statements, the irrevocable voting proxy over such excess voting rights will lapse accordingly.

The announcement stated that, as at the date of the joint announcement, Modern Dairy has determined that the irrevocable voting proxy in respect of 829,748,228 China Shengmu shares (approximately 9.90% of the total issued shares) will lapse, and that such shares, together with the remaining approximately 5.09% of the total issued China Shengmu shares held by Start Great, will cease to be subject to the terms and conditions of the voting agreement, while the irrevocable voting proxy over 1,257,194,284 China Shengmu shares (approximately 15.00%) will remain in full force. Accordingly, Start Great is entitled to exercise the voting rights attached to approximately 14.99% of the total issued China Shengmu shares; Modern Dairy will continue to be entitled to exercise the voting rights attached to those 1,257,194,284 shares (approximately 15.00%), and together with the 4,486,719,346 shares (approximately 53.53%) held by it after the close of the offer, Modern Dairy is entitled to exercise the voting rights attached to 5,743,913,630 shares (approximately 68.53%); and Modern Dairy and its concert parties are entitled to exercise the voting rights attached to an aggregate of 6,999,897,901 China Shengmu shares (approximately 83.52%).

The announcement also noted that, under Rule 13.32F of the Listing Rules, China Shengmu is regarded as having a severe public float shortfall. China Shengmu has failed to maintain the minimum specified public float under Rule 13.32B; if China Shengmu fails to regain compliance with Rule 13.32B by the deadline under Rule 13.32G(3), being 2 February 2028, the Stock Exchange will cancel the listing status of China Shengmu shares. Shareholders and potential investors should exercise caution when dealing in China Shengmu shares.

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