COSCO SHIPPING Development’s project of issuing shares to purchase assets and raise ancill...

　　On September 24th, the Listed Companies Merger, Acquisition and Reorganization Vetting Committee (the "M&A and Reorganization Committee") of the China Securities Regulatory Commission (the "CSRC") convened the 24th Working Meeting in 2021 of M&A and Reorganization Committee, at which the issuance of shares of COSCO SHIPPING Development Co., Ltd. (the "Company") to purchase assets and raise ancillary funds and related transaction (the "Transaction") were reviewed. According to the announcement of the CSRC, the Transaction of the Company was unconditionally approved. At present, the Company has not yet received the formal approval document from the CSRC and will make a further announcement upon receipt of the relevant approval document from the CSRC.

　　Overview of the Transaction Proposal

　　(I) Issuing shares to purchase assets

　　The Company proposes to issue shares to COSCO SHIPPING Investment to purchase its 100% equity interest in DFIC Qidong, 100% equity interest in DFIC Qingdao, 100% equity interest in DFIC Ningbo and 100% equity interest in Universal Technology.

　　(II) Raising ancillary funds

　　The Company proposes to conduct non-public issuance of shares to not more than 35 (including 35) qualified specific investors, including China Shipping, to raise ancillary funds of not more than RMB1,464 million in total, not exceeding 100% of the transaction price of the assets to be purchased by way of issuance of shares in such reorganization. The number of shares to be issued shall not exceed 30% of the total share capital of the listed company prior to the Transaction (i.e. not more than 3,482,437,500 shares). The final number of shares to be issued shall be subject to the limit of shares to be issued as approved by the CSRC and shall be determined by the board of directors of the Company or persons delegated by the board of directors in accordance with the delegation of the shareholders' general meeting and the actual situation at the time of the issuance. The amount of ancillary funds to be raised by China Shipping's proposed subscription is RMB600 million and shall not exceed the limit of the total ancillary funds to be raised as approved by the CSRC.

　　The Transaction was accepted by the CSRC on June 21st, 2021 and was unconditionally approved by the CSRC on September 24th.

Judging the situation and planning the layout

　　The container manufacturing industry has been in short supply since the second half of 2020, driving the substantial increase in container prices. While consolidating its own container manufacturing business, COSCO SHIPPING Development has taken stock of the situation and made plans to launch the project of issuing shares to purchase container manufacturing assets, so as to effectively integrate the container manufacturing resources within the Group, further leverage the scale effect and synergy effect, and also better implement the work of "ensuring stability on six fronts and security in six areas" (namely ensuring stability in employment, financial operations, foreign trade, foreign investment, domestic investment and expectations, as well as security in job, basic living needs, operations of market entities, food and energy, stable industrial and supply chains, and the normal functioning of primary-level governments).

Leapfrogging to second place in the world and achieving industrial upgrading

　　Upon completion of the Transaction, the Company will become the second largest container manufacturer in the world and achieve an overall scale of over one million in annual design capacity. The integration of the container factories in Qingdao, Ningbo and Qidong will benefit the Company to further improve and optimize the layout of its key regional resources, enhance its location advantages and effectively reduce transportation costs. The cold container production capacity of the Qingdao and Qidong container factories helps the company realize its diversification strategy to enter into the cold container market, enrich the container application scenarios and enhance its comprehensive service capabilities. With over 200 patented technologies, Universal Technology will greatly enhance the technological content of the Company's container manufacturing segment and help the Company explore container technology to effectively improve capacity utilization, thereby further realizing green and environment-friendly operations. The business linkage between the Company's container manufacturing segment and container leasing segment will be further strengthened, with synergistic development and enhanced core competitiveness.

　　In addition, the Transaction will simultaneously raise ancillary funds and replenish the working capital of the listed company, which will further optimize the capital structure of the Company and protect the interests of the Company and its shareholders.

　　The successful approval of the transaction for COSCO SHIPPING Development to purchase assets and raise ancillary funds is an important milestone for the sustainable development of the Company's container manufacturing business and reflects the high recognition of the Company by the capital market. The Company will seize the opportunity of industry development, make use of the scale advantage after integration, the synergy effect of shipping industry chain and the innovative thinking of industry + technology to achieve another leap in its core industry, and be committed to enhancing its overall value and realizing the high-quality development of the Company.