Shandong Chenming Paper Holdings Limited (CHENMING PAPER) has signed a creditors’ rights and debt set-off agreement with its 50%-owned associate Weifang Port Wood Chip Wharf Co., Ltd. to streamline inter-company balances and mitigate debt risk.

Under the arrangement, CHENMING PAPER and subsidiaries Shouguang Meilun Paper and Shouguang Chenming Import & Export will offset RMB 22.04 million in outstanding port fees and related charges against an existing shareholder loan of RMB 86.10 million advanced to Weifang Wood Chip Wharf.

In addition, the wharf company will accede, as joint debtor, to a sale-and-leaseback obligation originally borne by Shouguang Meilun. As Weifang Wood Chip Wharf makes repayments to Qingdao Guosheng Financial Leasing, the corresponding principal, interest and expenses—capped at RMB 34.62 million—will be deducted from the remaining shareholder loan. The combined offset totals RMB 56.66 million.

Post-transaction, no cash outflow is involved, and the company states that current and future operating cash flow and earnings will not be materially affected. Management expects the move to improve capital utilisation, optimise the balance-sheet structure and enhance risk resilience.

Because CHENMING PAPER’s deputy general manager Guo Qinyan chairs Weifang Wood Chip Wharf, the deal is classified as a related-party transaction. Independent directors unanimously endorsed the terms, which still require shareholder approval at an upcoming extraordinary general meeting.

Weifang Wood Chip Wharf reported total assets of RMB 474.67 million, liabilities of RMB 346.02 million and a net loss of RMB 28.52 million on revenue of RMB 29.18 million for 2025.

Year-to-date, CHENMING PAPER’s aggregate related transactions with the wharf company amount to RMB 21.19 million.