Chinese bulk shipping operator CSC Phoenix has announced that the company’s controlling shareholder, Tianjin Shunhang Shipping, has been sued by BOC International, the investment banking and securities brokerage subsidiary of Bank of China over a debt repayment dispute.
Shunhang Shipping secured financing of RMB70m ($11m) from BOC International by pledging part of its shares in CSC Phoenix to the latter in 2016 and has since been unable to make repayment according to the contract.
BOC International has now requested Shunhang Shipping to repay the RMB70m loan, RMB1.4m of interest and RMB1.63m of compensation.
CSC Phoenix warns that the lawsuit could have significant impact on the company’s stock trading.
This week, CSC Phoenix also reported that the company is facing a lack of tonnage with charter contracts for 15 bulkers expire by the end of June.