China Ocean Industry has entered into a sale and leaseback agreement with Ruilian Asset Management Company for the entire assets of its subsidiary yard Jiangzhou Union Shipbuilding.
Under the agreement, China Ocean Industry will sell Jiangzhou Union Shipbuilding to Ruilian Asset Management for RMB100m ($14.4m) and lease it back for five years.
The company will use the net proceeds from the transaction to repay outstanding debts.
In March, China Ocean Industry entered into a strategic cooperation agreement with Yangzijiang Shipbuilding to collaborate on the future development of Jiangzhou Union Shipbuilding, where operations have been suspended due to financial difficulties. Under the agreement, Yangzijiang will be responsible for managing Jiangzhou Union Shipbuilding and restoring normal production operation levels at the yard.