Hong Kong-listed shipbuilding group China Ocean Industry has received an enforcement order by a court in Jiangsu, ordering the company to transfer its entire 24% equity interest in Nantong Xiangyu Ocean Equipment to creditors.
According to China Ocean Industry, its wholly owned subsidiary Nantong Huakai Heavy Industry failed to repay RMB41m ($5.9m) debt to Rugao Fugang Construction Company and RMB6.92m debt to Nantong Tongbao Shipbuilding.
The court has ordered China Ocean Industry to transfer 21.23% equity interest of Nantong Xiangyu to Rugao Fugang and the remaining 2.77% equity interest to Nantong Tongbao to settle the outstanding debts.
Upon completion of the forced transfer, China Ocean Industry will cease to hold any equity interest in Nantong Xiangyu. The company now has one fully-owned shipyard Jiangzhou Union Shipbuilding.
Nantong Xiangyu was established at the end of 2016 after taking over the bankrupt Mingde Heavy Industry. State run Xiamen Xiangyu Group, Nantong Wangzhe Shipbuilding and China Ocean Industry holds 36%, 30% and 24% equity interest in the company respectively, the remaining 10% is held by a trust fund.