Yangzhou Guoyu Shipbuilding has suspended its operations due to financial difficulties and is laying off employees in order to downsize and cut costs.
According to a letter Guoyu Shipbuilding sent to its employees the shipyard has been making efforts in negotiating with its creditors banks, but the financial crisis at the yard has yet to be solved, and so it was decided to suspend all operations.
Guoyu Shipbuilding said it had no choice but to lay off employees and it has already started the severance work. They yard did not specify how many staff would be cut.
Earlier this week, Singapore shipowner Pioneer Marine terminated contracts with Guoyu Shipbuilding for the last two of six newbuild 38,400 dwt handysize bulkers it had on order at the yard.
The shipyard has already been hit this year by a worker salary dispute in January and last month its parent company, Wuhan Guoyu Group, said that the group had around $75m in overdue loans.
