Hong Kong-listed Huarong Energy, formerly Rongsheng Heavy Industries, will soon dispose of its entire shipbuilding assets nearly four years after the yard closed operations.
The company has announced that it has reached an agreement with a buyer on the principal terms for the disposal of its core assets and liabilities of the non-performing and debt-burdened shipbuilding and engineering business.
According to Huarong Energy, the ultimate beneficial owner of the buyer is a holder of a convertible bond issued by the company.
In addition to the disposal, the company also expects to conduct debt restructuring plans with an ultimate goal to refinance the business operations.
The company has reached an agreement in principle with certain creditors to capitalise debts amounting to around RMB3.1bn ($451m).
Upon completion of the disposal, Huarong Energy will cease all shipbuilding business and will be principally engaged in the sales of crude oil and production of oil products.
Once the largest private shipyard in China, Rongsheng Heavy Industries ceased shipbuilding operations in 2014 after it was hit by a major financial crisis and rebranded into Huarong Energy in 2015.