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Rongsheng looking for financial support
By Fu Chenghao |
July 6, 2013, Saturday
|
Print Edition
Print Edition
CHINA Rongsheng Heavy Industries Group Holdings Ltd, the nation's largest private shipbuilder, is "actively" seeking government financial support after cutting jobs amid an industry downturn.
The company also said it is expected to post a net loss in the first half of this year amid a slump in orders.
Yesterday's announcement sent its shares in Hong Kong plunging by as much as 17 percent. Trading in its shares was suspended on Thursday after the Wall Street Journal reported that the company had laid off 8,000 workers.
Rongsheng is actively seeking financial support from the government and big shareholders, the statement said. One shareholder, its founder Zhang Zhirong, has agreed to provide an interest-free 200 million yuan (US$32.6 million) loan, the shipbuilder said.
Zhang's loan grant is a reflection of how urgently Rongsheng needs cash to ease its financial woes. Zhang quit as chairman last year after he was allegedly involved in an insider-trading scandal in the United States.
The company also said it is in discussion with a number of banks and financial institutions on renewing existing credit facilities.
Rongsheng said it has "implemented workforce restructuring and optimization" as part of a strategy to transform itself into an integrated heavy industry conglomerate with a focus on serving clients in the offshore energy sector.
The company set up an offshore marine equipment unit in Singapore last year.
The company also said it is expected to post a net loss in the first half of this year amid a slump in orders.
Yesterday's announcement sent its shares in Hong Kong plunging by as much as 17 percent. Trading in its shares was suspended on Thursday after the Wall Street Journal reported that the company had laid off 8,000 workers.
Rongsheng is actively seeking financial support from the government and big shareholders, the statement said. One shareholder, its founder Zhang Zhirong, has agreed to provide an interest-free 200 million yuan (US$32.6 million) loan, the shipbuilder said.
Zhang's loan grant is a reflection of how urgently Rongsheng needs cash to ease its financial woes. Zhang quit as chairman last year after he was allegedly involved in an insider-trading scandal in the United States.
The company also said it is in discussion with a number of banks and financial institutions on renewing existing credit facilities.
Rongsheng said it has "implemented workforce restructuring and optimization" as part of a strategy to transform itself into an integrated heavy industry conglomerate with a focus on serving clients in the offshore energy sector.
The company set up an offshore marine equipment unit in Singapore last year.
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