Shipping and shipbuilding group Wuhan Guoyu Group has announced that the company and its subsidiaries currently have overdue loans totalling of RMB486m ($75m).
The company admits that it is facing financial difficulties due to weak demand in both the shipping and shipbuilding markets and it is currently in negotiations with banks to extend the loans.
Guoyu Group controls Yangzhou Guoyu Shipyard, and operates a shipping fleet of more than 30 vessels comprising of bulkers, containerships and LPG carriers.
Yangzhou Guoyu Shipyard was involved in a salary dispute with its employees due to the yard’s financial difficulties in January. It has also suffered with the cancellation of five handysize bulkers from Singapore owner Pioneer Marine in March.