Liuzhou Iron & Steel (601003.SH) holding subsidiary Guangxi Steel intends to receive a capital increase of 674 million yuan from Guangxi Investment Lin'gang One Fund.

Liuzhou Iron & Steel (601003.SH) announced that Guangxi Guangtou Lingang No.1 Industrial Development Fund Partnership Enterprise (Limited Partnership) (referred to as "Guangtou Lingang No.1 Fund" or "Investor") intends to make additional investments in our company's controlling subsidiary Guangxi Steel Group Co., Ltd. (referred to as "Guangxi Steel" or "Target Company"), with the existing shareholders waiving their preemptive rights. The Guangtou Lingang No.1 Fund will make the investment in Guangxi Steel through a cash subscription of shares at a price of RMB 1.1858 per unit of registered capital, totaling RMB 674 million (RMB 194 million as the first actual payment (subject to actual contribution), with the remaining to be paid within 12 months from the signing of the transaction agreement), of which RMB 568.39 million will be included in the registered capital, and RMB 105.61 million will be included in the capital surplus. After the capital injection, the Guangxi Steel will have a 2.2315% equity stake, with the funds coming from contributions from the partners of the Guangtou Lingang No.1 Fund. Currently, the actual contributions from all parties total RMB 200 million, with our company being one of its limited partners, holding a stake of 50.5%. This transaction is based on the long-term development strategy and operational conditions for careful decision-making. Guangxi Steel will provide financial support for significant projects through capital expansion, enhance the capacity to supply high-end, high-priced, high-profit products, promote the adjustment of product structure, and transition to a more high-end, intelligent, and green transformation. The introduction of external investors reflects the social investment sector's support and recognition for the company's high-quality transformation and upgrade. It also promotes the Guangxi Steel subsidiary in improving equity liquidity, enhancing capital strength, strengthening communication and operation capabilities in the capital market, and better realizing market value.