Qingdao Yangfan Shipbuilding is on the verge of applying for court receivership, a source close to the shipyard told Splash.
According to the source, the liquidation will be led by Qingdao government and the state-run shareholder Qingdao Huatong Group, which will guarantee that military products will be delivered on time during the liquidation process.
Qingdao Huatong Group had propose to the controlling shareholder of the yard, Jianlong Group, to jointly invest to save the yard however Jianlong Group turned down the proposal.
The shipyard has been suffering financial difficulties and it cut over 400 employees in September.
In August, over 500 employees of the shipyard protested in front of a local government office to seek help regarding unpaid salaries, following a similar protest at the yard in May.
When contacted by Splash, an official at the yard refused to make any comment.