Shanghai Gas (Group) Co.,Ltd. announced that it has entered into a capital increase agreement with new investor, Towngas China Company Limited (SEHK:1083) for private placement of common shares for gross proceeds of CNY 4,700,000,000 on October 27, 2020. The investor will acquire 25% stake in the company. Out of the gross proceeds, CNY 333,333,333 will go towards registered capital and CNY 4,366,666,667 towards capital reserve. The investor has obtained a written approval from the immediate shareholders representing approximately 68.21% stake in the investor company, therefore, the board of directors of investor does not intend to convene a general meeting for obtaining shareholders’ approval. The transaction is subject to approval by the relevant People's Republic of China regulatory authorities designated to perform national security review on foreign investments in People's Republic of China companies, by State-owned Assets Supervision and Administration Commission or its local equivalent, issuance of the completion certificate by the Shanghai Assets and Equity Exchange, completion of the requisite filing or registration for the change in ownership of state-owned assets. As a part of the transaction, the investor will be entitled to nominate one director or the deputy chairman, one supervisor, the deputy general manager, and the deputy financial manager. Post to the transaction, the registered capital of the company will increase from CNY 1,000,000,000 to CNY 1,333,333,333 and the stake held by Shenergy Group Company Limited will decrease from 100% to 75%. The investor will pay a transaction fees of CNY 5,875,000 to Shanghai Assets and Equity Exchange with respect to the transaction. The investor will be prohibited from selling or transferring all or any part of its 25% stake in the company within 3 years from the closing. The longstop date is one year after the date of the agreement or such other date as may be agreed in writing by the investor and company.