The merger between two largest Chinese state-run shipbuilders CSSC and CSIC still has some way to go due to the complexity of the deal, with CSSC now facing a hurdle in the restructuring of its technology business.
Shanghai-listed CSSC Science & Technology, the marine technology unit of China State Shipbuilding Corporation (CSSC), has announced that its restructuring plan has been rejected by China Securities Regulatory Commission (CSRC).
CSSC Science & Technology released the restructuring plan in August under which it planned to acquire Haiying Enterprise, a subsea ultrasonic equipment manufacturer, from CSSC Group and another CSSC unit for a total price of RMB2.11bn ($301m). The company also intended to issue new shares to specific investors to raise RMB1.12bn funds.
CSRC said the rejections was due to major uncertainties relating to the future profitability of Haiying Enterprise.
The two largest Chinese state-run shipbuilders CSSC and CSIC are currently in the middle of a complex merger process involving eight listed companies. Both groups have started a series internal restructurings to pave way for the major merger deal.