Shipowners desperate to see sizeable Chinese yard space shuttered to help the supply/demand equilibrium will be disappointed with news from Jiangsu where a lifeline has just been handed to what was once the nation’s largest private shipbuilder.
Yangzijiang Shipbuilding will use the idle capacity at Rongsheng Heavy Industries for the construction of six VLOCs.
Three Chinese companies – China Merchants, China Ore Shipping and ICBC Leasing – ordered 30 VLOCs in total at four domestic shipyards in March. Yangzijiang has received orders for six VLOCs from ICBC Leasing.
The vessels are scheduled for deliveries at the end of 2018.
“We will not step in until the debt issues have a clear resolution. Only after Rongsheng and its creditor banks reach a debt-to-equity swap will we lend support in operational and managerial matters. Capital investment from us is off the table,” Yangzijiang chairman Ren Yuanlin said in August last year.
Hong Kong-listed Huarong Energy, formerly Rongsheng Heavy Industries, announced last week that it plans to issue 17.1bn new shares to creditors at HK$1.2 ($0.15) per share in order to offset debts. So far, 12 of 22 bank creditors and suppliers creditors holding RMB323m ($49.6m) debts, have entered into letters of intent with Huarong Energy to subscribe to the shares.
