Shanghai Bestway on verge of bankruptcy

Shanghai Bestway on verge of bankruptcy

Shanghai-based ship design and shipbuilding firm Bestway Marine & Energy Technology is in deep financial trouble with lawsuits against the company stacking up.

In a stock exchange filing, the company announced that Guotai Junan Securities has filed a lawsuit against the company and its controlling shareholder Liu Nan due to a financial dispute.

Guotai Junan Securities has demanded an overdue loan repayment of RMB145.4m ($21.55m) plus relevant compensation and interest from Shanghai Bestway. Liu pledged his shares in the company to Guotai Junan as part of loan deal in 2017.

The company has already been sued by a number of creditors over debt disputes, and Shanghai Bestway said this legal case might lead to an ownership change of the company.

Shanghai Bestway has been unable to repay heavy debts, secure new financing, and many senior managers have left the company. Additionally, Liu has failed in three separate deals to sell his shares in the company.

In October last year, the company also reported that its subsidiary yard Dajin Heavy Industry was facing multiple risks in several major shipbuilding contracts, which would potentially hurt the company financially.

According to VesselsValue, Dajin Heavy’s orderbook current includes two 4,500dwt tankers, four 8,000 dwt tankers and one liftboat.

The company reported a net loss of RMB1.335bn ($197m) for the first three quarters of 2018, which is about twice as much as the company’s total net profit in the past ten years.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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