China Shenhua Energy (01088) Issues Additional Impairment Compensation Undertakings for Exploration Mining Rights

China Shenhua Energy Company Limited (01088) announced supplementary impairment compensation undertakings on two exploration mining rights. The measures are designed to protect the company and its shareholders within the framework of an ongoing transaction involving asset acquisitions through A Shares issuance and cash payment.

On 28 January 2026, China Energy provided undertakings to address potential impairments to (1) the “Western Exploration of Jirentai Bituminous Coal Mine, Nilka County,” with a book value and transaction consideration of RMB81.5926 million, and (2) the “Heidaigou Exploration in the Zhunge’er Coalfield, Inner Mongolia Autonomous Region,” with a book value and consideration of RMB2,500.7213 million. Both assets are currently held by Pingzhuang Coal, an indirect subsidiary of the group.

Under the Western Exploration Mining Right undertaking, an impairment test will be carried out during the year of completion of the transaction and over the following two financial years. If impairment occurs, China Energy will compensate China Shenhua primarily by returning the shares initially received as part of the acquisition, supplemented in cash if necessary. The total compensation is capped at RMB81.5926 million.

In the Heidaigou Exploration Mining Right undertaking, China Energy commits to assist in securing the mining license and completing commencement procedures by 31 December 2028. If an impairment is identified after an income-based valuation, compensation is similarly capped at RMB2,500.7213 million. If the license and related approvals are not obtained by the agreed deadline, China Energy will repurchase the asset at the original consideration plus development costs and accrued interest.

China Shenhua Energy confirms that these arrangements do not modify the fundamental commercial terms or economic structure of the transaction as previously disclosed. No further re-compliance with reporting or approval requirements under the Hong Kong Listing Rules is required. The company’s board, including its independent non-executive directors, deems the undertakings fair and reasonable and in the best interest of shareholders.