SH IND URBAN (00563.HK): Wuxi REIT-Style Securitisation to Raise ~RMB 1.196bn; Disposal Consideration RMB 396mn

NewTimeSpace News: On 20 October 2026, Shanghai Industrial Urban Development Group Limited (the "Company") announced that it proposes to implement a REIT-like asset-backed securitisation of its Wuxi property through a special scheme, aiming to unlock the value of the Group's existing property assets, generate cash proceeds, optimise its capital structure and lower its net gearing ratio. The scheme is expected to raise approximately RMB 1,196 million from investors by issuing approximately RMB 1,077 million of senior asset-backed securities and approximately RMB 119 million of subordinated asset-backed securities.

The announcement disclosed that, as one step in implementing the scheme, on 20 October 2026 Shanghai Urban Development, a subsidiary 59% owned by the Company, entered into an equity transfer agreement with the scheme manager acting for the scheme, under which Shanghai Urban Development agreed to sell and the scheme manager agreed to acquire the entire equity interest in the target company (which holds the property) for a cash consideration of RMB 396 million; the scheme will also provide a new loan of RMB 800 million to the target company, to be applied in full to repay RMB 800 million of shareholder loans owed by the target company to Shanghai Urban Development. Upon completion, Shanghai Urban Development will hold no interest in the target company, which will cease to be a subsidiary of the Company and whose financial results will no longer be consolidated. In addition, Shanghai Urban Development will subscribe for no more than RMB 30 million (about 25% of the subordinated asset-backed securities and about 2.5% of the scheme's total issue size), will provide liquidity support and will be granted a right of first refusal.

The Company stated that the property is a landmark twin-tower complex in Wuxi, China, with total gross floor area of approximately 147,100 square metres, comprising the Crowne Plaza Wuxi Taihu, Holiday Inn Express Wuxi Taihu, Grade A offices, retail facilities and apartments; the scheme has a term of about 18 years with no open-period arrangement, and the asset-backed securities will not be publicly listed on any stock exchange but may be transferred on the Shanghai Stock Exchange's fixed income platform. As the target company is a state-owned enterprise, the disposal was conducted through public tender on the Shanghai United Assets and Equity Exchange in accordance with applicable PRC rules on state-owned asset transfers, with a reserve price of RMB 396 million, not lower than the appraised value of the entire equity interest in the valuation report. Under an alternative size test accepted by the Stock Exchange for the disposal (with the consideration ratio calculated by reference to the Group's consolidated net asset value rather than the Company's market capitalisation), the applicable percentage ratio exceeds 5% but is below 25%, making the disposal a discloseable transaction; all applicable percentage ratios for the subscription are below 5% and it does not, on a standalone basis, constitute a discloseable transaction.