SUMEC Group, a machinery manufacturer and a major creditor of Yangzhou Dayang Shipbuilding, has released an announcement to explain the risks the company is facing in regard to the bankruptcy of the shipyard.
Dayang Shipbuilding, a subsidiary yard of Sinopacific Shipbuilding, was declared bankrupt this week due to a long standing debt crisis.
According to SUMEC, its ship exporting subsidiary SUMEC Marine has had collaborations with Dayang Shipbuilding for the construction of 10 vessels in total. So far, seven of the ten vessels have been delivered and the construction of the remaining three 82,000 dwt bulk carriers have been suspended.
The three vessels were ordered by Greek owners, although SUMEC has now acquired the ownership of the three vessels.
Dayang Shipbuiding also owes an outstanding debt of RMB983m ($145.6m) to SUMEC.
SUMEC is second beneficiary in the shipyard’s debt redemption order after the largest creditor China Exim Bank. After a valuation of the shipyard’s entire asset, SUMEC reckons the outstanding debt could be covered if the shipyard ends up going through a liquidation process.
Nevertheless, SUMEC believes there is a great possibility that Dayang Shipbuidling could complete a restructuring.
SUMEC said it will work with the receiver of Dayang to resume construction of the undelivered vessels in order to minimize the company’s risk.