Hong Kong-listed Titan Petrochemicals has filed a petition with High Court of Hong Kong to wind up Chinese private shipbuilding group China Ocean Industry.
Titan claims China Ocean Industry failed to settle debt of HK$10.66m ($1.36m) owed to the company. The two parties are currently in negotiations for an amicable solution out of court before the hearing date, but Titan said the company has also sought for legal advice on the next steps and possible actions regarding the petition.
China Ocean Industry is currently looking to move into the LNG sector. The company has entered into a MOU with PetroChina Kunlun Gas to set up a joint venture which will be focused on the development of LNG for vehicles and ships in Jiangxi province as its shipbuilding business has been facing challenges.
Last month, China Ocean Industry failed to sell its stake in Nantong Huakai Heavy Industry as a court in Jiangsu ruled to liquidate the subsidiary yard.
In May, China Ocean Industry was forced to transfer its entire 24% equity interest in Nantong Xiangyu Ocean Equipment to creditors due to debt issues. It also transferred the management of subsidiary yard Jiangzhou Union Shipbuilding to Yangzijiang Shipbuilding through a joint venture agreement signed last year.
Titan Petrochemicals itself is also suffering from financial troubles. The company was demanded to pay $217m of debt by the bankruptcy manager of its controlling shareholder Guangzhou Zhenrong Energy (GZE), which is currently in compulsory liquidation.