SHIMAO GROUP (00813) announced that on May 15, 2026, the company and Shanghai Shimao entered into two debt settlement agreements with creditors. Accordingly, the company agreed to settle debts owed to the creditors by issuing a total of approximately 71.54 million new shares at an issue price of HK$6.00 per capitalization share. The capitalization shares represent about 0.729% of the enlarged share capital, with the issue price representing a premium of approximately 3770.97% over the closing price of HK$0.1550 per share on May 15. It is reported that the first creditor, Xiamen Yuandi Enterprise Management Co., Ltd., and the second creditor, Xiamen Houjin Brand Planning Co., Ltd., hold the 21 Shanghai Shimao MTN002 issued by Shanghai Shimao through their fully subscribed trust plans, with a principal debt amount of RMB 190 million. As of the date of this announcement, the 21 Shanghai Shimao MTN002 has matured and remains outstanding. The third creditor, Shanghai Deji Investment Management Co., Ltd., holds the 21 Shanghai Shimao MTN002 issued by Shanghai Shimao through its fully subscribed trust plan, with a principal debt amount of RMB 189 million. As of the date of this announcement, the 21 Shanghai Shimao MTN002 has matured and remains outstanding. The announcement stated that the total principal and interest owed by the group to the creditors under the 21 Shanghai Shimao MTN002 is approximately RMB 420 million. The debt capitalization will enable the group to settle part of its debts while reducing its debt-to-asset ratio, thereby improving its financial condition. Therefore, the directors believe the debt capitalization is in the overall interests of the company and its shareholders.