Greater ChinaShipyards

Yangzijiang hands Rongsheng a lifeline

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.

Singapore-listed Yangzijiang Shipbuilding has been linked with taking over the operations of Rongsheng repeatedly in recent years.

“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.

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.
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