Zhitong Finance App News, Shangshi City Development (00563) announced that the company plans to implement securitization of real estate investment trust assets for this property through a special plan, with the aim of monetizing the value of the Group's existing property assets, generating cash proceeds, optimizing the capital structure, and reducing the net debt ratio. It is anticipated that the special plan will raise approximately RMB 1,196 billion from investors through the issuance of approximately RMB 1,077 million in priority asset-backed securities and approximately RMB 119 million in secondary asset-backed securities.
As one of the implementation steps of the special plan, on October 20, 2026, Shanghai Chengkai, a subsidiary of the company with 59% interest, signed an equity transfer agreement with the plan manager acting on behalf of the special plan. According to the share transfer agreement, Shanghai Chengkai agreed to sell, and the plan manager (acting on behalf of the special plan) agreed to acquire all of the shares of the target company Shanghai Chengkai (Group) Wuxi Real Estate Co., Ltd. (the target company holds the property) at a cash cost of RMB 396 million. The special plan (through the plan manager) will also provide a new loan of RMB 800 million to the target company. The amount will be used to repay the RMB 800 million shareholder loan owed by the target company to Shanghai Chengkai.
In addition, Shanghai Chengkai will carry out subscription matters. The total subscription amount will not exceed RMB 30 million, which is equivalent to about 25% of secondary asset-backed securities, and about 2.5% of the total issuance scale of the special plan. Except for subscription matters, it is anticipated that all asset-backed securities will be placed to independent third party investors. Shanghai Chengkai will also provide liquidity support, and Shanghai Chengkai (or its designated entity) will be granted priority purchasing rights.
According to reports, the property is owned and operated by the target company in accordance with law and will become a relevant asset for the special plan. The property is a landmark twin tower complex located in Wuxi, China, with a total construction area of about 1471,000 square meters, including Crowne Plaza Wuxi Taihu Lake, Holiday Inn Express Wuxi Taihu Lake, Grade A office buildings, commercial facilities and apartments. The net operating income generated by the property (including rent, hotel revenue and other operating cash flow) will be injected into the special plan.
The company believes that the proposed transaction is expected to increase the Group's cash balance by about 1,166 billion yuan and reduce its net debt; convert existing property assets into cash proceeds, and improve the Group's capital turnover efficiency.