Shanghai: Financially troubled Rongsheng Heavy Industries, one of the largest private shipyards in China, has announced that it will not proceed with a proposed warrant sale after a major investor was said to have been detained by Chinese authorities.
Rongsheng cited unspecified media reports that Wang Ping, owner of private-equity firm Kingwin Victory Investment, was detained last month on criminal allegations unrelated to the deal. Kingwin Victory Investment agreed in October to invest at least HK$510m ($65.7m) for warrants issued by Rongsheng, with a possible total investment of HK$3.2bn.
“In light of the current circumstances, the board has decided that it is not in the best interests of the company and its shareholders to proceed with the warrant issue,” Rongsheng said in a release, adding that it would seek legal advice on the matter.
Rongsheng announced last year that the proceeds would mainly be used for further exploration, development and operation of four oil fields in Kyrgyzstan in which it acquired a stake in September.