ZMJ's Convertible Bond Projects Secure Land-Use Rights; Subsidiary Hengda Zhikong's Minority Shareholders Opt Out of Pro-Rata Funding

ZMJ disclosed that all four project sites under its RMB 43.5 billion convertible bond issuance have received land-use certificates. Funding for non-wholly-owned subsidiary Hengda Zhikong's projects will be provided by ZMJ through loans, with minority shareholders not participating in pro-rata capital increases or loans. The interest rate will reference market rates and be negotiated, with no harm to listed company interests.

Source: 上交所

Zhengzhou Coal Mining Machinery Group Co., Ltd. (ZMJ) disclosed in a supplemental legal opinion that land-use rights for all projects under its planned convertible bond issuance of up to RMB 43.5 billion have been registered.

The issuance aims to raise no more than RMB 4.35 billion, after deducting issuance costs, for five purposes: a new energy vehicle high-end components industrial base project, an intelligent upgrade project for high-end hydraulic component production systems, an intelligent mobile robot manufacturing base project, an intelligent manufacturing full-scenario R&D center project, and supplementary working capital. The post-tax internal rates of return for these projects were previously disclosed as 12.24%, 28.6%, and 15.69%, respectively.

As of the date of the supplemental legal opinion, the implementing entities for the four physical construction projects have obtained land-use rights. The new energy vehicle components project is implemented by SEG Electric Technology (Changzhou) Co., Ltd., with certificate Su (2026) Changzhou City Immovable Property No. 0055541. The hydraulic component upgrade project is implemented by ZMJ Limited, with certificate Yu (2025) Zhengzhou City Immovable Property No. 0252469. The R&D center and robot manufacturing base projects are both implemented by the company's non-wholly-owned subsidiary Zhengzhou Hengda Zhikong Technology Co., Ltd., with certificate Yu (2026) Zhengzhou City Immovable Property No. 0118291 for both. All four plots are designated for industrial use, complying with regulatory guidelines.

Regarding the projects implemented by Hengda Zhikong, the opinion states that ZMJ holds 99.4925% equity in the subsidiary, with the remaining 0.5075% held by six executives and core personnel including Luo Kaicheng and Wang Junfu. Due to the large investment amounts, after negotiation with minority shareholders, ZMJ will provide loans to Hengda Zhikong for the project funds, and the minority shareholders will not participate in pro-rata capital increases or loans. Loan interest will be paid by Hengda Zhikong at a rate determined by reference to contemporaneous bank lending rates, negotiated based on protecting the interests of the issuer and all shareholders. Minority shareholders will indirectly bear the corresponding interest costs in proportion to their shareholdings. This arrangement does not harm the interests of the listed company and complies with relevant regulatory requirements.

The opinion also updates the description of the quasi-financial business of the wholly-owned subsidiary ZMJ Commercial Factoring. As of December 31, 2025, this subsidiary engages in commercial factoring and is classified as a quasi-financial business due to some clients not directly linked to the company's supply chain. It has not been subject to administrative penalties in the most recent year and period, and its operational compliance meets regulatory standards.