Dacheng – 150 million Preference Shares of China Construction Are Listed at Shanghai Stock Exchange

On 17 March 2015, 150 million preference shares of China State Construction Engineering Corporation Limited (stock code: SH601668, “China Construction”) were successfully listed at Shanghai Stock Exchange. On 30 December 2014, China Construction received approval from the China Securities Regulatory Commission (“Commission”) in respect of the non-public issuance of no more than 300 millionpreference shares by China Construction. Such preference shares are expected to be issued in multiple tranches.The initial issuance of 150 million shares with a nominal value of RMB 100 per shareis now completed, and China Construction has received the proceeds of the initialissuancein total of RMB 15 billion. The remaining tranches of such issuance are expected be completed within 24 months after the date of the Commission’s approval.

China Construction is the first non-financial state-owned enterprise that has successfully completed the issuance of preference shares at Shanghai Stock Exchange. This financing achievement demonstrated China Construction’s outstanding business performance, scientific managementand remarkable ability of marketing control. Upon completion of issuance of all the 300 million preference shares, the net asset of China Construction will increase by 16.8%, and the size of the operating funds will increase by 15.4%, while the asset-liability ratio will drop by 2.6%. In addition, the dividend rate of the initial issuance of150 million preference shareswill be fixed at 5.8% in the first five years, which is the lowest in the market. Such rate is even lower than the five-year benchmark lending rate. Therefore, by issuing the preference shares, China Construction substantially reduced its financial cost.

Joint sponsors China International Capital Corporation Limited and CITIC Securities Company Limited, auditor PwC, and legal counsel Dacheng Law Offices have been working closely to achieve this successful issuance by China Construction.

Legal team of Dacheng Law Offices, including Associate lawyer Gao Xiang, Bi Lan, Zhao Liang, Liu Xiaoyan, Wang Jirong, Wang Ding, Chen Fenfen, Partner Li Jieyu and Qu Xiangang, Senior Partner Jian Ying and Yu Xugang, provided legal services to China Construction for this issuance.


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