Greater China

Debt-laden Rongsheng suspends trading, talks with Waigaoqiao over restructuring

Shanghai: Rongsheng Heavy Industries, one of China’s largest private shipbuilders, has suspended its stock trading from today due to a pending major restructuring deal, following the announcement of its first half results.

Rongsheng has reported a net loss of RMB3.06bn for the first half of this year, greatly increased from a net loss of RMB1.26bn in the same period of last year.

It has been reported this week that CSSC-affiliated Shanghai Waigaoqiao Shipbuilding is considering taking over the debt-ridden shipyard.

A high-level official at Waigaoqiao Shipbuilding confirmed that the yard is in talks with Rongsheng to acquire or lease some shipbuilding facilities and equipment, but not for a takeover.

“Rongsheng has serious debt problems, it is unlikely for us to take it over,” the official said.

According to the official, although the overall shipbuilding market is depressed, as a major state-run shipyard, Waigaoqiao Shipbuilding still has received lots of orders, and it has been considering expanding its capacity by leasing or acquiring shipbuilding facilities from Rongsheng, and the two companies have been in negotiations since last year. [29/08/14]

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