China Shipbuilding Industry (601989.SH) disclosed a stock exchange and absorption merger plan with China CSSC (600150.SH), with an exchange ratio of 1:0.1335. The resumption of trading will be on September 19th.

China Shipbuilding Industry (601989.SH) has released a pre-announcement of the stock swap absorption and merger of China CSSC Industrial Co., Ltd. by China CSSC Heavy Industry Co., Ltd. and the related transactions. China CSSC plans to issue A shares to all shareholders of China Shipbuilding Industry in exchange for the merger. China CSSC will be the absorbing and merging party, while China Shipbuilding Industry will be the absorbed and merged party. After the merger is completed, China Shipbuilding Industry will delist and deregister as a legal entity, and China CSSC will inherit all assets, liabilities, businesses, personnel, contracts, and all other rights and obligations of China Shipbuilding Industry. The A shares issued by China CSSC in this merger will apply for listing on the main board of the Shanghai Stock Exchange. The stock swap absorption and merger target in this transaction are all shareholders of China Shipbuilding Industry registered on the equity registration date after the market close on the implementation date of the merger. On the equity registration date of the merger, China Shipbuilding Industry shareholders who have not declared, partially declared, have no right to declare, or have invalidly declared their cash option rights, and holders of China Shipbuilding Industry shares due to providing cash option rights, will all be converted into A shares issued by China CSSC in this merger according to the exchange ratio. The boards of directors of both parties will announce the equity registration date after obtaining approval from the Shanghai Stock Exchange and registration approval from the China Securities Regulatory Commission in this transaction. The pricing reference date for this stock swap absorption and merger is the date of the first board of directors' resolution announcement for both parties. According to the relevant provisions of the Restructuring Management Measures, the exchange price of China CSSC in this merger is determined as 37.84 yuan/share based on the average trading price of the stock for the 120 trading days prior to the pricing reference date. The exchange price of China Shipbuilding Industry is determined as 5.05 yuan/share based on the average trading price of the stock for the 120 trading days prior to the pricing reference date, and the exchange ratio is determined accordingly. The formula for the exchange ratio is: number of China CSSC shares = China Shipbuilding Industry exchange price / China CSSC exchange price (calculated to four decimal places). Following this formula, the exchange ratio between China Shipbuilding Industry and China CSSC is 1: 0.1335, meaning 1 share of China Shipbuilding Industry can be exchanged for 0.1335 shares of China CSSC. This transaction will give dissenting shareholders of China CSSC the right to purchase at a price of 80% of the average trading price of China CSSC shares for the 120 trading days before the pricing reference date, i.e., 30.27 yuan/share. It will also give dissenting shareholders of China Shipbuilding Industry the cash option right at a price of 80% of the average trading price of China Shipbuilding Industry shares for the 120 trading days before the pricing reference date, i.e., 4.04 yuan/share. The company's shares will resume trading on September 19, 2024 (Thursday) after applying to the Shanghai Stock Exchange.