Nanfang Pump Industry (300145.SZ) plans to increase capital in Shaho Zhongyuan in the form of debt-to-equity swap and publicly list and transfer controlling rights.

Nanfang Pump Industry (300145.SZ) announced that the Board of Directors and Board of Supervisors have approved the proposal regarding the implementation of debt-to-equity conversion and equity transfer for its subsidiary. They have agreed to increase the capital of the subsidiary, Shahe Zhongyuan, through debt-to-equity conversion and publicly list the transfer of controlling rights. The company plans to convert the 131 million yuan debt held in Shahe Zhongyuan and the 40.9513 million yuan debt held by its wholly-owned subsidiary Hebei Lei Yuan into long-term equity investments in Shahe Zhongyuan. After the capital increase, Shahe Zhongyuan's registered capital will increase from 55 million yuan to 174.4586 million yuan (estimated). Nanfang Pump Industry's shareholding in Shahe Zhongyuan will decrease from 94.62% to 81.96% (estimated), while Hebei Lei Yuan's shareholding will increase from 0.19% to 16.40% (estimated). After the debt-to-equity conversion, Nanfang Pump Industry will retain 49% of the shares in Shahe Zhongyuan, and the remaining shares will be transferred externally; Hebei Lei Yuan and Zhongjian Huafan will transfer all their shares in Shahe Zhongyuan to external parties. This debt-to-equity conversion is an initial measure to optimize the asset allocation of PPP projects for the company. Based on the overall strategic layout adjustment, after the completion of the debt-to-equity conversion, the company plans to transfer the controlling rights of Shahe Zhongyuan through a public listing to repatriate funds and focus on the development of core businesses.