Wenzhou Shipping, a subsidiary of state run Zhejiang Shipping Group, has been declared bankruptcy at Wenzhou Intermediate People’s Court.
The company’s assets will be liquidated, and it has already started severance procedures with its employees.
Zhejiang Shipping announced in April that it was likely to start a debt restructuring amid depressed market conditions in the dry bulk shipping sector. Two shipping subsidiaries of the group, Wenzhou Shipping and Taizhou Shipping, have overdue financial leasing repayments totalling RMB36.62m ($5.66m), and are also unable to repay a RMB4.41m ($682,000) financial leasing payment and RMB16m ($2.47m) in bank loan repayments.
According to the company’s website, Wenzhou Shipping has a fleet of 21 vessels with total capacity of 200,000dwt.
In December 2015, Wuzhou Shipyard, the shipbuilding unit of Zhejiang Shipping Group, went into liquidation and become the first state-run shipyard to go bankrupt.