Rongsheng refinancing debt after huge losses

Shanghai: China’s largest private shipyard, Rongsheng Heavy Industries has reported a huge loss of RMB8.68bn for the fiscal year of 2013.

Rongsheng said the group has been actively negotiating with a number of commercial banks for the renewal and extension of loans and banking facilities with extended repayment terms and reduced interest rates, or alternatively securing new loans or facilities.

The group has signed a framework agreement with a group of Chinese banks including Bank of China, China Exim Bank and China Minsheng Bank, with which the group had total current and non-current loans amounting to RMB9.2bn and RMB1.14bn respectively, to extend the repayment and renewal terms to the end of 2015.

Rongsheng said it is also seeking alternative sources of financing, and it expects to issue convertible bond of HK$1bn in April which are scheduled for repayment in October 2016. The group just issued HK$1bn bonds in January this year.

In the meantime, Rongsheng will reduce remuneration of executive directors and senior level management by 50% and 30-50% respectively.

“We believe that the global shipbuilding industry has bottomed out. The current excessive shipping capacity is expected to be absorbed by the growing trade volumes in the course of global economic recovery. Against the backdrop of the recovering shipping demand versus the shrinking shipbuilding capacity, we expect an increasing demand for bulk carriers and large containerships with a steadily rising pricing index in the coming years,” Rongsheng said in the release. [31/03/14]

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