Cash injection eases shipbuilder's financial woes

Some of Rongsheng's subsidiaries, including Hefei Rong An Power Machinery Co and Rongsheng Machinery Co, signed agreements with domestic lenders, led by Shanghai Pudong Development Bank, to extend debt repayments to the end of 2015.

The Shanghai-based company said on Aug 21 that it is entering the energy business by buying 60 percent in a Kyrgyzstan oilfield by issuing new shares. It said on Oct 15 that it is seeking to identify new investment opportunities outside of China including in Central Asia.

Shares in the maker of bulk carriers and oil tankers had been suspended from trading since Aug 29 in Hong Kong, pending the restructuring details. Rongsheng had first-half net losses of 3.06 billion yuan ($501 million), more than double last year's.

Rongsheng was overdue on principal and interest payments on 8.57 billion yuan of bank loans on June 30, according to a Hong Kong Stock Exchange filing on Aug 29.

In July, the shipbuilder made full interest payments on 8.3 billion yuan of those borrowings, it said in the same filing.

Banks had taken no action to enforce the loan agreements but demanded immediate repayment, Rongsheng said then.

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