Nantong People’s Court has officially declared the bankruptcy of debt-ridden Mingde Heavy Industry as the yard has been unable to complete a restructuring.
Sainty Marine applied with the court to restructure Mingde Heavy Industry as the largest creditor of the yard in December 2014. However, it was thrown out from the restructuring by the receiver of Mingde in June. The receiver reckoned that the difficult financial conditions surrounding Sainty Marine meant that the company could no longer support the restructuring of Mingde. The receiver of Mingde has also failed to find new investors to save the yard.
Mingde was a leading shipyard for chemical tankers. Due to its financial difficulties Mingde was unable to receive bank guarantees, and had to team up with Sainty Marine on new orders.
Currently Sainty Marine is also suffering from a financial crisis, it is trying to sell four already completed 64,000dwt bulkers to offset some debts. It said earlier that it might face up to RMB2.94bn ($473m) in losses if the restructuring of Mingde fails.