Huarong Energy, formerly Rongsheng Heavy Industries, had admitted its restructuring is not going smoothly.
Once China’s largest private shipyard, the fall of Rongsheng has been dramatic.
The company recently sent a report to the local government in Jiangsu on how its restructuring is going. The workforce today is at 500, down from 4,000 last year and more than 15,000 at its peak. The yard is just focusing on steel structures, having exited shipbuilding. Its monthly revenues are now less than RMB2m ($300k), and it has overdue salaries to pay worth RMB300m ($45m), RMB20bn ($3bn) of bank debts and RMB3bn ($450m) of unpaid debts to suppliers.
“The operation of the company is extremely difficult now and the company has to deal with lots of irrational requests from former employees over salary payments,” the company said in the report.
In June, a group of enraged former employees of Rongsheng Heavy Industries sent an open letter to Huarong Energy requesting salaries, severance and associated insurance payments owed by the company, otherwise they will seek help from government authorities.
Huarong Energy announced a restructuring plan in March to issue 17.1bn new shares to creditors at HK$1.2 ($0.15) per share to offset debts.
The company said that it would hopefully make a progress regarding the restructuring in September or October.