rongsheng shipyard china made in china

The shipyard, located in the Yangtze River Delta, was founded in 2006, and became the largest private shipbuilder in China, churning out giant valemaxes at its four large dry-docks, before a massive financial collapse forced it to cease operations in 2014.

Broking sources in China tell Splash that the yard’s former chief operating officer David Luan is now preparing to officially reopen the yard, to be known as SPS Shipyard, a reference to ShipParts.com, a business he created in 2015 after quitting Rongsheng.

SPS Shipyard will start to market cape and kamsarmax slots from next week with next available slots being from Q3 2025 onwards. Luan has yet to reply to questions sent by Splash earlier today.

RUGAO, China/SINGAPORE (Reuters) - Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder.A view of the Rongsheng Heavy Industries shipyard is seen in Nantong, Jiangsu province December 4, 2013. REUTERS/Aly Song

The shipbuilder this week predicted a substantial annual loss, just months after appealing to the government for financial help as it reeled from industry overcapacity and shrinking orders. Rongsheng lost an annual record 572.6 million yuan ($92 million) last year, and lost 1.3 billion yuan in the first half of this year.

While Beijing seems intent to promote a shift away from an investment-heavy model, with companies reliant on government cash injections, some analysts say Rongsheng is too big for China to let fail.

Local media reported in July that Rongsheng had laid off as many as 8,000 workers as demand slowed. Three years ago, the company had about 20,000 staff and contract employees. This week, the shipbuilder said an unspecified number of workers had been made redundant this year.

A purpose-built town near the shipyard’s main gate, with thousands of flats, supermarkets and restaurants, is largely deserted. Nine of every 10 shops are boarded up; the police station and hospital are locked.

“In this area we’re only really selling to workers from the shipyard. If they’re not here who do we sell to?” said one of the few remaining shopkeepers, surnamed Sui, playing a videogame at his work-wear store. “I know people with salaries held back and they can’t pay for things. I can’t continue if things stay the same.”

In the shadow of the shipyard gate, workers told Reuters the facility was still operating but morale was low, activity was slowing with the lack of new orders and some payments to workers had been delayed.

“Without new orders it’s hard to see how operations can continue,” said one worker wearing oil-spattered overalls and a Rongsheng hardhat, adding he was still waiting to be paid for September. He didn’t want to give his name as he feared he could lose his job.

“Morale in the office is quite low, since we don’t know what is the plan,” said a Rongsheng executive, who declined to be named as he is not authorized to speak to the media. “We have been getting orders but can’t seem to get construction loans from banks to build these projects.”

While Rongsheng has won just two orders this year, state-backed rival Shanghai Waigaoqiao Shipbuildinghas secured 50, according to shipbroker data. Singapore-listed Yangzijiang Shipbuildinghas won more than $1 billion in new orders and is moving into offshore jack-up rig construction, noted Jon Windham, head industrials analyst at Barclays in Hong Kong.

Frontline, a shipping company controlled by Norwegian business tycoon John Fredriksen, ordered two oil tankers from Rongsheng in 2010 for delivery earlier this year. It now expects to receive both of them in 2014, Frontline CEO Jens Martin Jensen told Reuters.

Greek shipowner DryShips Inchas also questioned whether other large tankers on order will be delivered. DryShips said Rongsheng is building 43 percent of the Suezmax vessels - tankers up to 200,000 deadweight tons - in the current global order book. That"s equivalent to 23 ships, according to Rongsheng data.

Speaking at a quarterly results briefing last month, DryShips Chief Financial Officer Ziad Nakhleh said Rongsheng was “a yard that, as we stated before, is facing difficulties and, as such, we believe there is a high probability they will not be delivered.” DryShips has four dry cargo vessels on order at the Chinese firm.

Rongsheng declined to comment on the Dryships order, citing client confidentiality. “For other orders on hand, our delivery plan is still ongoing,” a spokesman said.

At least two law firms in Shanghai and Singapore are acting for shipowners seeking compensation from Rongsheng for late or cancelled orders. “I’m now dealing with several cases against Rongsheng,” said Lawrence Chen, senior partner at law firm Wintell & Co in Shanghai.

Billionaire Zhang Zhirong, who founded Rongsheng in 2005 and is the shipyard"s biggest shareholder, last month announced plans to privatize Hong Kong-listed Glorious Property Holdingsin a HK$4.57 billion ($589.45 million) deal - a move analysts said could raise money to plug Rongsheng"s debts.

Meanwhile, Rongsheng’s shipyard woes have already pushed many people away from nearby centers, and others said they would have to go if things don’t pick up. Some said they hoped the local government might step in with financial support.

The Rugao government did not respond to requests for comment on whether it would lend financial or other support to Rongsheng. Annual reports show Rongsheng has received state subsidies in the past three years.

The exodus has left row upon row of deserted apartments, with just a few old garments strewn on the floor and empty name tags to show for what was a bustling community before China’s economic growth began to slow and credit tightened at a time when global shipping, too, turned down.

(Bloomberg) — China Rongsheng Heavy Industries Group Holdings Ltd., the shipbuilder whose woes made it a symbol of the country’s credit binge, said it planned to sell assets to an unidentified Chinese acquirer.

The company intends to sell the core assets and liabilities of its onshore shipbuilding and offshore engineering businesses, according to a statement to the Hong Kong exchange Monday. Rongsheng’s shares, which were halted March 11, will resume trading on March 17.

Once China’s largest shipbuilder outside government control, Shanghai-based Rongsheng has been searching for funds after orders for new ships dried up and the company fell behind on principal and interest payments on 8.57 billion yuan ($1.4 billion) of bank loans. Rongsheng’s struggles illustrate the difficulties shipbuilders face in competing with state-owned yards that have government backing and easier access to funds.

Rongsheng and the proposed buyer have entered into an exclusivity period while assets and liabilities are valued, according to the statement. The agreement will expire on June 30, the company said.

Rongsheng said March 5 it wouldn’t proceed with a proposed warrant sale after Kingwin Victory Investment Ltd. owner Wang Ping — a potential investor who had pledged as much as HK$3.2 billion ($412 million) — was said to have been detained.

The company is trying to complete a restructuring by June and has proposed to change its name to China Huarong Energy Co. to more accurately reflect its expansion and new business scope.

Yangzijiang Shipbuilding Holdings Ltd. said previously it had been approached by China’s government about buying a stake in Rongsheng, and that no decision had been made. Yangzijiang Chief Financial Officer Liu Hua said today that the company isn’t involved in the agreement announced by Rongsheng, according to the company’s external representative.

Rongsheng has sought help from the government to benefit from a rebound in China’s shipbuilding industry — the world’s second biggest — after cutting its workforce and running up debts amid a global downturn in orders.

As orders for new ships began to dry up, China in 2013 issued a three-year plan urging financial institutions to support the shipbuilding industry. Ship owners placing orders for China-made vessels, engines and some parts should get better funding, the State Council said. A third of the more than 1,600 shipyards in China could shut down in the next five years, an industry association predicted earlier.

In September, the government responded by listing Rongsheng’s Jiangsu shipyard unit among 51 shipbuilding facilities in China deemed worthy of policy support as the industry grapples with overcapacity.

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 company said in October.

Another once-leading privately-owned yard China Huarong Energy Company, previously and better known as China Rongsheng Heavy Industries, continues to struggle with debts and ongoing talks with its creditors. The shipbuilder with huge yard facilities is now literally a �ghost yard�, where operations have ceased as funds dried up.

Jiangsu Rongsheng Heavy Industries Group Co. used to employ more than 30,000 people in the eastern city of Rugao. Once China�s largest shipbuilder, by 2015 Rongsheng was on the verge of bankruptcy. Orders had dried up and banks are refusing credit. Questions have been raised about the shipyard�s business practices, including allegations of padded order books. And Rongsheng was apparently behind on repaying some of the 20.4 billion yuan in combined debt owed to 14 banks, three trusts and three leasing firms.

Rongsheng is on the ropes now that it had completed a multi-year order for so-called Valemax ships for the Brazilian iron ore mining giant Companhia Vale do Rio Doce. The last of these 16 bulk carriers, the Ore Ningbo, was delivered in January 2015. With a carrying capacity of up to 400,000 tons, Valemaxes are the world�s largest ore carriers. Vale hired Rongsheng to build the ships starting in 2008, and has tolerated the shipyard�s slow pace: The Ore Ningbo was delivered three years late. Rongsheng employees said the Ore Ningbo may have been the shipyard�s last product because no new ship orders are expected and all contracts for unfinished ships have either been canceled or are in jeopardy.

Founder and former chairman Zhang Zhirong started the company in 2005 with money made when he worked as a property developer in the 1990s. The new shipyard stunned the industry by clinching major vessel orders from the start, even at a time when most of the world�s shipyards were slumping. Rongsheng�s success attracted investors and banks to the company�s side, fueling its expansion.

The shipyard, a sprawling facility spread across one-third of Changqingsha Island in the middle of the Yangtze River, suffered from a lack of capacity and management problems. As a result, the company had trouble meeting its contract obligations, including delivery timetables. Rongsheng�s problems were tied to difficulties with delivering ships. Many of Rongsheng�s order cancellations were due to its own delivery delays.

After the global financial crisis of 2008, many ship owners could no longer afford paying in advance for new vessels. So builders such as Rongsheng started arranging up-front financing with Chinese banks that got projects off the ground.

Rongsheng built ships with a combined capacity of 8 million tons in 2010 and was preparing to begin filling US$ 3 billion in new orders the following year. But the company�s 2011 orders wound up totaling only US$ 1.8 billion. That same year, Rongsheng�s customers canceled contracts for 23 new vessels.

In 2012, Rongsheng received orders for only two ships. Layoffs ensued, with some 20,000 workers getting the axe. The company closed the year with a net loss of 573 million yuan, down from a 1.7 billion yuan net profit in 2011 and despite 1.27 billion yuan in government subsidies. The bleeding worsened in 2013, with 8.7 billion yuan in reported losses. Despite a recovery of the Chinese shipbuilding industry in 2014, Rongsheng saw no relief, as its clients canceled orders for 59 vessels that year.

Roxen Shipping, a company controlled by Chinese businessman Guan Xiong, reportedly stepped in to rescue some US$ 2 billion worth of ship contracts that were canceled by Rongsheng�s other customers. Without these orders, Rongsheng never would have maintained its status as the No. 1 shipbuilder in China from 2009 to 2013.

Rongsheng�s capital crunch worsened since February 2014, when the China Development Bank (CDB) demanded more collateral after the company failed to make a scheduled payment on a 710 million yuan loan. When Rongsheng refused, the CDB called the loan. Other banks that issued loans to the shipbuilder had taken similar steps.

Rongsheng�s weak financial position was highlighted by a third-quarter 2014 financial report in which the company posted a net loss of 2.4 billion yuan. It also reported 31.3 billion yuan in liabilities, including 7.6 billion yuan worth of outstanding short-term debt.

It would cost at least 5 billion yuan to restart operations at Rongsheng�s facility, plus they have a huge amount of debt. Buying Rongsheng would not be a good deal.

(Beijing) – Piles of rusty steel bars and old ship parts are virtually all that"s left of a sprawling shipyard in the eastern city of Rugao, where Jiangsu Rongsheng Heavy Industries Group Co. used to employ more than 30,000 people.

Once China"s largest shipbuilder, Rongsheng is on the verge of bankruptcy. Orders have dried up and banks are refusing credit. Questions have been raised about the shipyard"s business practices, including allegations of padded order books. And Rongsheng is apparently behind on repaying some of the 20.4 billion yuan in combined debt owed to 14 banks, three trusts and three leasing firms, sources told Caixin.

Mounting cash-flow problems and swingeing staff cuts at one of China’s leading yards has dented confidence in the nation’s shipbuilding industry and could damage attempts by already struggling businesses to win newbuilding orders.

Troubled China Rongsheng Heavy Industries’ Nantong yard is the country’s third largest shipbuilding facility on a production basis and has been regarded as one of the more commercially progressive following its 2010 flotation in Hong Kong and its efforts in developing business with US investment houses like Goldman Sachs.

China Rongsheng Heavy Industries Group, a leading private shipbuilder, said Wednesday that it expects to report a substantial full-year loss just months after it appealed to the government for financial help.

"The company believes that the net loss is primarily attributable to the decrease in revenue as a result of the company"s conservative sales strategy under the current trough stage of the shipbuilding market," China Rongsheng said in a statement to the Hong Kong Stock Exchange.

Greek ship owner Dryships Inc has already questioned whether some of the ships on order at China Rongsheng will be delivered, which could hit its revenue and profitability next year.

Dryships has four dry bulk carriers on order at the company"s shipbuilding subsidiary, Jiangsu Rongsheng Heavy Industries, that are due for delivery in 2014.

China Rongsheng, which sought financial help from the government in July, has said it won only two shipbuilding orders worth $55.6 million last year when its target was $1.8 billion worth of contracts.

RM2CY8K6W–Labourers work at a Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province May 21, 2012. The global shipping market, battered for the past few years by a severe downturn, will likely improve from the second half of this year, said an executive with major shipbuilder China Rongsheng Heavy Industries Group Holdings on Monday. REUTERS/Aly Song (CHINA - Tags: MARITIME BUSINESS CONSTRUCTION COMMODITIES)

RM2CXEFJ0–A view of the Rongsheng Heavy Industries shipyard is seen in Nantong, Jiangsu province December 4, 2013. Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS EMPLOYMENT SOCIETY)

RMW96H39–--File--View of an exhibition hall at the headquarters of Rongsheng Heavy Industries Group in Nantong, east Chinas Jiangsu province, 4 November 2010.

RM2HMPEWX–Zhangjiakou, China"s Hebei Province. 11th Feb, 2022. Liu Rongsheng of China competes during cross-country skiing men"s 15km classic at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 11, 2022. Credit: Hu Huhu/Xinhua/Alamy Live News

RMW92M88–--FILE--The stand of Rongsheng Heavy Industries is seen during an exhibition in Shanghai, China, 29 November 2011. Rongsheng Heavy Industries, whose

RMW95J26–--FILE--Zhang Zhirong, Chairman of Glorious Property Holdings Limited and Chairman of Rongsheng Heavy Industries Group Holdings Ltd., attends a ground

RMW961RD–--FILE--View of the stand of Rongsheng Heavy Industries during an exhibition in Shanghai, China, 29 November 2011. China Rongsheng Heavy Industries

RMW95HXC–--FILE--Visitors look at the machines of Anhui Rongan Heavy Industry, the subsidiary of China Rongsheng Heavy Industries Group Holdings Ltd in an Expo

RM2CWMP5X–A vacant dormitory is seen at the Rongsheng community in Nantong, Jiangsu province December 4, 2013. Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS EMPLOYMENT SOCIETY)

RM2HMPDMD–Zhangjiakou, China"s Hebei Province. 11th Feb, 2022. Liu Rongsheng of China passes the finish line during cross-country skiing men"s 15km classic at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 11, 2022. Credit: Mu Yu/Xinhua/Alamy Live News

RM2HKYKWJ–Zhangjiakou, China"s Hebei Province. 6th Feb, 2022. Liu Rongsheng (C) of China competes during Cross-Country Skiing Men"s 15km 15km Skiathlon at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 6, 2022. Credit: Hu Huhu/Xinhua/Alamy Live News

RMW95J09–--FILE--Visitors look at the machines of Anhui Rongan Heavy Industry, the subsidiary of China Rongsheng Heavy Industries Group Holdings Ltd in an Expo

RMW96KRG–--File--Visitors are seen in the exhibition hall at the headquarters of Rongsheng Heavy Industries Group in Nantong, east Chinas Jiangsu province, 4 N

RM2D0PB6A–A closed police station is seen at the Rongsheng community in Nantong, Jiangsu province December 4, 2013. Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS EMPLOYMENT SOCIETY CRIME LAW)

RM2HKYJWB–Zhangjiakou, China"s Hebei Province. 6th Feb, 2022. Liu Rongsheng (R) of China competes during Cross-Country Skiing Men"s 15km 15km Skiathlon at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 6, 2022. Credit: Mu Yu/Xinhua/Alamy Live News

RMW96KTG–--FILE--People visit the headquarters of Rongsheng Heavy Industries in Nantong city, east Chinas Jiangsu province, 4 November 2010. Shipbuilder Chin

RMW92M7G–--FILE--A Chinese employee poses at the stand of Rongsheng Heavy Industries during an exhibition in Shanghai, China, 29 November 2011. Rongsheng Hea

RM2CYH4T9–Workers ride a motorcycle past closed restaurants at the Rongsheng community in Nantong, Jiangsu province December 4, 2013. Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS EMPLOYMENT SOCIETY)

RM2HKYWMC–Zhangjiakou, China"s Hebei Province. 6th Feb, 2022. Liu Rongsheng of China competes during Cross-Country Skiing Men"s 15km 15km Skiathlon at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 6, 2022. Credit: Liu Chan/Xinhua/Alamy Live News

RMW961KH–--FILE--A Chinese employee poses at the stand of Rongsheng Heavy Industries during an exhibition in Shanghai, China, 29 November 2011. China Rongshe

RMW8CJA6–--FILE--A netizen browses the Chinese website of Rongsheng Heavy Industries in Liaocheng city, east China"s Shandong province, 3 July 2013. Chinese

RMW8YJ5G–--FILE--A ship is being built at the shipyard of Rongsheng Heavy Industries in Rugao, Nantong city, east Chinas Jiangsu province, 12 December 2013.

RM2D01WH0–A worker rides a bicycle inside of the Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province December 4, 2013. Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS EMPLOYMENT SOCIETY)

RM2HKYH9T–Zhangjiakou, China"s Hebei Province. 6th Feb, 2022. Liu Rongsheng (front) of China competes during Cross-Country Skiing Men"s 15km 15km Skiathlon at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 6, 2022. Credit: Zhang Hongxiang/Xinhua/Alamy Live News

RMW8WYE1–--FILE--A signboard of Rongsheng is pictured at a shipyard of Rongsheng Heavy Industries in Rugao city, east Chinas Jiangsu province, 12 December 2013

RM2CXAAER–Workers ride motorcycles and bicycle after their shifts at an entrance of the Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province December 4, 2013. Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS EMPLOYMENT SOCIETY)

RMW96KPW–--FILE--Chinese workers are building a ship at the shipyard of Rongsheng Heavy Industries in Nantong city, east Chinas Jiangsu province, 4 November 20

RMW91GDK–--FILE--A netizen browses the Chinese website of Rongsheng Heavy Industries in Liaocheng city, east Chinas Shandong province, 3 July 2013. China Ron

RM2HKYH4D–Zhangjiakou, China"s Hebei Province. 6th Feb, 2022. Liu Rongsheng (front) of China competes during Cross-Country Skiing Men"s 15km 15km Skiathlon at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 6, 2022. Credit: Guo Cheng/Xinhua/Alamy Live News

RM2CY7A2X–A worker rides a motorcycle on an empty street at the Rongsheng community in Nantong, Jiangsu province December 4, 2013. Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS EMPLOYMENT SOCIETY)

RM2CXP561–Chen Qiang, chief executive officer of China Rongsheng Heavy Industries, attends the naming ceremony of two Valemax ships built by Rongsheng Heavy Industries in Nantong, Jiangsu province, May 21, 2012. The global shipping market, battered for the past few years by a severe downturn, will likely improve from the second half of this year, said an executive with major shipbuilder China Rongsheng Heavy Industries Group Holdings on Monday. REUTERS/Aly Song (CHINA - Tags: BUSINESS COMMODITIES MARITIME TRANSPORT)

RMW91GEJ–--FILE--A netizen browses the Chinese website of Rongsheng Heavy Industries in Liaocheng city, east Chinas Shandong province, 3 July 2013. China Ron

RM2HKYH7D–Zhangjiakou, China"s Hebei Province. 6th Feb, 2022. Liu Rongsheng of China competes during Cross-Country Skiing Men"s 15km 15km Skiathlon at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 6, 2022. Credit: Mu Yu/Xinhua/Alamy Live News

RMW8YE7M–--FILE--View of a shipyard of Rongsheng Heavy Industries in Nantong city, east Chinas Jiangsu province, 24 May 2012. China Rongsheng Heavy Industrie

RM2HN07XA–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Hu Huhu/Xinhua/Alamy Live News

RM2CXEBAD–Claudio Alves, Global Marketing Director of Vale, World"s largest iron ore miner, attends the naming ceremony of two Valemax ships built by Rongsheng Heavy Industries in Nantong, Jiangsu province, May 21, 2012. The global shipping market, battered for the past few years by a severe downturn, will likely improve from the second half of this year, said an executive with major shipbuilder China Rongsheng Heavy Industries Group Holdings on Monday. REUTERS/Aly Song (CHINA - Tags: BUSINESS COMMODITIES MARITIME TRANSPORT)

RMW93H43–--FILE--Ships are being built at a shipyard of Rongsheng Heavy Industries in Nantong city, east Chinas Jiangsu province, 24 May 2012. China Rongshen

RM2HN0G5E–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Zhang Hongxiang/Xinhua/Alamy Live News

RM2CY9JR4–Claudio Alves, Global Marketing Director of Vale, World"s largest iron ore miner, attends the naming ceremony of two Valemax ships built by Rongsheng Heavy Industries in Nantong, Jiangsu province, May 21, 2012. The global shipping market, battered for the past few years by a severe downturn, will likely improve from the second half of this year, said an executive with major shipbuilder China Rongsheng Heavy Industries Group Holdings on Monday. REUTERS/Aly Song (CHINA - Tags: BUSINESS COMMODITIES MARITIME TRANSPORT)

RMW93H40–--FILE--Ships are being built at a shipyard of Rongsheng Heavy Industries in Nantong city, east Chinas Jiangsu province, 24 May 2012. China Rongshen

RM2HN20KG–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Liu Chan/Xinhua/Alamy Live News

RM2CXCXJB–VIP guests visit a 380,000 DWT class Very Large Ore Carrier (VLOC) during the naming ceremony of two Valemax ships built by Rongsheng Heavy Industries in Nantong, Jiangsu province May 21, 2012. The global shipping market, battered for the past few years by a severe downturn, will likely improve from the second half of this year, said an executive with major shipbuilder China Rongsheng Heavy Industries Group Holdings on Monday. REUTERS/Aly Song (CHINA - Tags: MARITIME BUSINESS COMMODITIES)

RMW93H3M–--FILE--Ships are being built at a shipyard of Rongsheng Heavy Industries in Nantong city, east Chinas Jiangsu province, 24 May 2012. China Rongshen

RM2HN0G8E–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Zhang Hongxiang/Xinhua/Alamy Live News

RM2CY9JR2–Workers stand in front of a 380,000 DWT class Very Large Ore Carrier (VLOC) during the naming ceremony of two Valemax ships built by Rongsheng Heavy Industries in Nantong, Jiangsu province May 21, 2012. The global shipping market, battered for the past few years by a severe downturn, will likely improve from the second half of this year, said an executive with major shipbuilder China Rongsheng Heavy Industries Group Holdings on Monday. REUTERS/Aly Song (CHINA - Tags: MARITIME BUSINESS COMMODITIES)

RMW93H6B–--FILE--Ships are being built at a shipyard of Rongsheng Heavy Industries in Nantong city, east Chinas Jiangsu province, 24 May 2012. China Rongshen

RM2HN2122–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Liu Chan/Xinhua/Alamy Live News

RMW8YE7R–--FILE--View of a shipyard of Rongsheng Heavy Industries in Nantong city, east Chinas Jiangsu province, 23 May 2012. A heavily indebted Chinese shi

RM2HMMKN4–Zhangjiakou, China"s Hebei Province. 11th Feb, 2022. Liu Rongsheng of China competes during cross-country skiing men"s 15km classic of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 11, 2022. Credit: Liu Chan/Xinhua/Alamy Live News

RM2HN211R–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng pf China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Deng Hua/Xinhua/Alamy Live News

RM2CWKEG9–Workers stand in front of a 380,000 DWT class Very Large Ore Carrier (VLOC) during the naming ceremony of two Valemax ships built by Rongsheng Heavy Industries in Nantong, Jiangsu province May 21, 2012. The global shipping market, battered for the past few years by a severe downturn, will likely improve from the second half of this year, said an executive with major shipbuilder China Rongsheng Heavy Industries Group Holdings on Monday. REUTERS/Aly Song (CHINA - Tags: MARITIME BUSINESS COMMODITIES)

RMW96MJM–--FILE--A shipbuilding plant of China Rongsheng Heavy Industries Group Holdings Ltd is seen in Nantong city, east Chinas Jiangsu province, 23 May 2012

RMW96KT6–--FILE--Chinese workers walk past the logo of China Rongsheng Heavy Industries Group Holdings Ltd in an office building in Nantong city, east Chinas A

RM2HN1YFX–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng (R) of China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Mu Yu/Xinhua/Alamy Live News

RMW93F2K–--FILE--Chinese workers queue up to board a bus at a shipyard of Rongsheng Heavy Industries in Rugao city, east Chinas Jiangsu province, 23 August 201

RMW93H3T–--FILE--Chinese employees work at a shipbuilding plant of Jiangsu Rongsheng Heavy Industries Group Co. ,Ltd. in Nantong, east Chinas Jiangsu province,

RMW98F60–53-year old Hang Rongsheng measures the model of the Yellow Crane Tower, made from toothpicks, in Shanghai, China, 22 August 2011. Hang Rongsheng, c

RMW933HF–--FILE--A sign board of China Citic Bank, subsidiary of China Citic Group is seen in Weifang, east Chinas Shandong province, 22 December 2012. Rongs

RMW938Y8–--FILE--A customer walks out of a branch of China Citic Bank, subsidiary of China Citic Group in Guangzhou city, southeast Chinas Guangdong province,

RM2CWXTEK–Workers stand in front of a 380,000 DWT class Very Large Ore Carrier (VLOC) during the naming ceremony of two Valemax ships built by Rongsheng Heavy Industries in Nantong, Jiangsu province May 21, 2012. The global shipping market, battered for the past few years by a severe downturn, will likely improve from the second half of this year, said an executive with major shipbuilder China Rongsheng Heavy Industries Group Holdings on Monday. REUTERS/Aly Song (CHINA - Tags: MARITIME BUSINESS COMMODITIES)

RMW92M4W–--FILE--Staff are seen at the stand of Jinhai Heavy Industry Co., during Marintec China in Shanghai, China, 29 November 2012. With orders for new

RM2CYTC7F–Chen Qiang, chief executive officer of China Rongsheng Heavy Industries, poses in an office after an interview with Reuters in Hong Kong July 19, 2011. China Rongsheng Heavy Industries Group Holdings Ltd, the country"s largest privately owned shipbuilder, will achieve or even exceed its $3 billion new order target in 2011, its chief executive officer, Qiang, said on Tuesday. To match interview RONGSHENG/ REUTERS/Tyrone Siu (CHINA - Tags: BUSINESS)

RMW91T3D–--FILE--A ship being built is seen at the shipyard of Jinhai Heavy Industry Co., on an island of Zhoushan Archipelago, southeast chinas Zhejiang provi

RM2HN0DAN–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng (L) of China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Wang Song/Xinhua/Alamy Live News

RM2HMN1WC–Zhangjiakou, North China"s Hebei Province. 11th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 15km classic of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, North China"s Hebei Province, Feb. 11, 2022. Credit: Deng Hua/Xinhua/Alamy Live News

RM2E65YM2–Chen Qiang, chief executive officer of China Rongsheng Heavy Industries, poses in an office after an interview with Reuters in Hong Kong July 19, 2011. China Rongsheng Heavy Industries Group Holdings Ltd, the country"s largest privately owned shipbuilder, will achieve or even exceed its $3 billion new order target in 2011, its chief executive officer, Qiang, said on Tuesday. To match interview RONGSHENG/ REUTERS/Tyrone Siu (CHINA - Tags: BUSINESS)

RM2HMN27W–Zhangjiakou, North China"s Hebei Province. 11th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 15km classic of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, North China"s Hebei Province, Feb. 11, 2022. Credit: Deng Hua/Xinhua/Alamy Live News

RM2D0R611–Chen Qiang, chief executive officer of China Rongsheng Heavy Industries, poses in a office after an interview with Reuters in Hong Kong July 19, 2011. China Rongsheng Heavy Industries Group Holdings Ltd, the country"s largest privately owned shipbuilder, will achieve or even exceed its $3 billion new order target in 2011, its chief executive officer, Qiang, said on Tuesday. To match interview RONGSHENG/ REUTERS/Tyrone Siu (CHINA - Tags: BUSINESS)

RM2CWWX07–A company logo is seen at the entrance of the Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province December 4, 2013. China"s biggest private shipbuilder, China Rongsheng Heavy Industries Group, posted a second straight annual loss on March 31, 2014, as new orders were less than half its target, and is in talks with banks about loan repayments. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS MARITIME)

RM2HMN1W5–Zhangjiakou, North China"s Hebei Province. 11th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 15km classic of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, North China"s Hebei Province, Feb. 11, 2022. Credit: Deng Hua/Xinhua/Alamy Live News

RM2CXHEMX–Workers ride motorcycles and bicycles after their shifts at an entrance of the Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province December 4, 2013. China"s biggest private shipbuilder, China Rongsheng Heavy Industries Group, posted a second straight annual loss on March 31, 2014, as new orders were less than half its target, and is in talks with banks about loan repayments. Picture taken December 4, 2013. REUTERS/Aly Song (CHINA - Tags: BUSINESS MARITIME)

RM2CXAP7K–Labourers stand on a new ship at a Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province, in this file photo taken May 21, 2012. China Rongsheng Heavy Industries Group, the country"s largest private shipbuilder, posted its sharpest fall in half-year profit - down 82 percent - on a dearth of new orders, putting further pressure on its stretched balance sheet. Rongsheng warned on August 21, 2012, that economic uncertainties such as the euro zone debt crisis would continue to weigh on the global shipping market. Picture taken May 21, 2012. REUTERS/Aly Song/Files (CHINABUSINESS MARITI

RM2HMN21C–Zhangjiakou, North China"s Hebei Province. 11th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 15km classic of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, North China"s Hebei Province, Feb. 11, 2022. Credit: Deng Hua/Xinhua/Alamy Live News

RM2D07154–A view of the Rongsheng Heavy Industries shipyard is seen in Nantong, Jiangsu province, in this file photo taken May 21, 2012. China Rongsheng Heavy Industries Group, the country"s largest private shipbuilder, posted its sharpest fall in half-year profit - down 82 percent - on a dearth of new orders, putting further pressure on its stretched balance sheet. Rongsheng warned on August 21, 2012, that economic uncertainties such as the euro zone debt crisis would continue to weigh on the global shipping market. Picture taken May 21, 2012. REUTERS/Aly Song/Files (CHINA - Tags: BUSINESS MARITIME)

RM2HMN3MK–Zhangjiakou, North China"s Hebei Province. 11th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 15km classic of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, North China"s Hebei Province, Feb. 11, 2022. Credit: Hu Huhu/Xinhua/Alamy Live News

RM2HM9EFM–Zhangjiakou, China"s Hebei Province. 8th Feb, 2022. Liu Rongsheng of China competes during the men"s cross-country skiing sprint free qualification of the Beijing 2022 Winter Olympics at Zhangjiakou National Cross-country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 8, 2022. Credit: Mu Yu/Xinhua/Alamy Live News

RM2HN20G7–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng (L) and Wang Qiang of China compete during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Liu Chan/Xinhua/Alamy Live News

RM2E68M95–A view of the Rongsheng Heavy Industries shipyard is seen in Nantong, Jiangsu province, in this file photo taken May 21, 2012. China Rongsheng Heavy Industries Group, the country"s largest private shipbuilder, posted its sharpest fall in half-year profit - down 82 percent - on a dearth of new orders, putting further pressure on its stretched balance sheet. Rongsheng warned on August 21, 2012, that economic uncertainties such as the euro zone debt crisis would continue to weigh on the global shipping market. Picture taken May 21, 2012. REUTERS/Aly Song/Files (CHINA - Tags: BUSINESS MARITIME)

RM2HKXK7X–2022 Beijing Olympics - Cross-Country Skiing - Men"s 15km + 15km Skiathlon - National Cross-Country Centre, Zhangjiakou, China - February 6, 2022. Liu Rongsheng of China in action. REUTERS/Hannah Mckay

RM2HMMB79–2022 Beijing Olympics - Cross-Country Skiing - Men"s 15km Classic - National Cross-Country Centre, Zhangjiakou, China - February 11, 2022. Liu Rongsheng of China in action. REUTERS/Lindsey Wasson

RM2HN20T2–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Shang Jincai (L) and Liu Rongsheng of China competes during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Liu Chan/Xinhua/Alamy Live News

RM2HMMAPC–2022 Beijing Olympics - Cross-Country Skiing - Men"s 15km Classic - National Cross-Country Centre, Zhangjiakou, China - February 11, 2022. Liu Rongsheng of China in action. REUTERS/Lindsey Wasson

RM2HMYH8D–2022 Beijing Olympics - Cross-Country Skiing - Men"s 4 x 10km Relay - National Cross-Country Centre, Zhangjiakou, China - February 13, 2022. Liu Rongsheng of China in action. REUTERS/Lindsey Wasson

RM2HN0D6W–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Liu Rongsheng (R) of China and Antoine Cyr of Canada compete during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Hu Huhu/Xinhua/Alamy Live News

RM2HN214K–Zhangjiakou, China"s Hebei Province. 13th Feb, 2022. Antoine Cyr (L) of Canada and Liu Rongsheng of China compete during the cross-country skiing men"s 4x10 km relay of the Beijing Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 13, 2022. Credit: Deng Hua/Xinhua/Alamy Live News

RM2HM92R3–Beijing, China"s Hebei Province. 8th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s sprint free qulification match of Beijing 2022 Winter Olympics at Zhangjiakou National Cross-country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 8, 2022. Credit: Wang Song/Xinhua/Alamy Live News

RM2FMJX8F–Altay, China"s Xinjiang Uygur Autonomous Region. 10th May, 2021. Liu Rongsheng of National Cross-Country Skiing Team competes during the men"s 15km mass start classic event at the FIS Cross-Country Skiing China City Tour in Sarkobu Cross-Country Ski Track, Altay City, northwest China"s Xinjiang Uygur Autonomous Region, May 10, 2021. Credit: Hou Zhaokang/Xinhua/Alamy Live News

RM2FMJX8B–Altay, China"s Xinjiang Uygur Autonomous Region. 10th May, 2021. Shang Jincai (L) and Liu Rongsheng of National Cross-Country Skiing Team celebrate after finishing the men"s 15km mass start classic event at the FIS Cross-Country Skiing China City Tour in Sarkobu Cross-Country Ski Track, Altay City, northwest China"s Xinjiang Uygur Autonomous Region, May 10, 2021. Credit: Zanghaer Bolati/Xinhua/Alamy Live News

RM2HP7A4F–Zhangjiakou, China"s Hebei Province. 19th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 50km mass start free of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 19, 2022. The men"s 50km cross-country mass start race on Saturday has been delayed by an hour to 1500 local time (0700 GMT) and shortened to 30km due to high winds at the National Cross-Country Skiing Centre. Credit: Hu Huhu/Xinhua/Alamy Live News

RM2HP6R28–Beijing, China"s Hebei Province. 19th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 50km mass start free of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 19, 2022. The men"s 50km cross-country mass start race on Saturday has been delayed by an hour to 1500 local time (0700 GMT) and shortened to 30km due to high winds at the National Cross-Country Centre. Credit: Liu Chan/Xinhua/Alamy Live News

RM2HP7GR8–Zhangjiakou, China"s Hebei Province. 19th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 50km mass start free of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 19, 2022. The men"s 50km cross-country mass start race on Saturday has been delayed by an hour to 1500 local time (0700 GMT) and shortened to 30km due to high winds at the National Cross-Country Skiing Centre. Credit: Mu Yu/Xinhua/Alamy Live News

RM2HP79RK–Zhangjiakou, China"s Hebei Province. 19th Feb, 2022. Liu Rongsheng of China competes during the cross-country skiing men"s 50km mass start free of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 19, 2022. The men"s 50km cross-country mass start race on Saturday has been delayed by an hour to 1500 local time (0700 GMT) and shortened to 30km due to high winds at the National Cross-Country Skiing Centre. Credit: Hu Huhu/Xinhua/Alamy Live News

RM2HP799D–Zhangjiakou, China"s Hebei Province. 19th Feb, 2022. Hadesi Badelihan (R) and Liu Rongsheng of China compete during the cross-country skiing men"s 50km mass start free of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 19, 2022. The men"s 50km cross-country mass start race on Saturday has been delayed by an hour to 1500 local time (0700 GMT) and shortened to 30km due to high winds at the National Cross-Country Skiing Centre. Credit: Liu Chan/Xinhua/Alamy Live News

RM2HP6W5G–Zhangjiakou, China"s Hebei Province. 19th Feb, 2022. Liu Rongsheng of China passes the finish line during the cross-country skiing men"s 50km mass start free of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 19, 2022. The men"s 50km cross-country mass start race on Saturday has been delayed by an hour to 1500 local time (0700 GMT) and shortened to 30km due to high winds at the National Cross-Country Centre. Credit: Deng Hua/Xinhua/Alamy Live News

RM2HP79F3–Zhangjiakou, China"s Hebei Province. 19th Feb, 2022. Wang Qiang (R) and Liu Rongsheng of China compete during the cross-country skiing men"s 50km mass start free of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 19, 2022. The men"s 50km cross-country mass start race on Saturday has been delayed by an hour to 1500 local time (0700 GMT) and shortened to 30km due to high winds at the National Cross-Country Skiing Centre. Credit: Deng Hua/Xinhua/Alamy Live News

RM2HP71XE–Zhangjiakou, China"s Hebei Province. 19th Feb, 2022. Wang Qiang (L) and Liu Rongsheng of China compete during the cross-country skiing men"s 50km mass start free of Beijing 2022 Winter Olympics at National Cross-Country Skiing Centre in Zhangjiakou, north China"s Hebei Province, Feb. 19, 2022. The men"s 50km cross-country mass start race on Saturday has been delayed by an hour to 1500 local time (0700 GMT) and shortened to 30km due to high winds at the National Cross-Country Skiing Centre. Credit: Mu Yu/Xinhua/Alamy Live News

Beijing - Shipbuilder China Rongsheng said it aimed to finish restructuring its Jiangsu shipyard’s assets by June next year, and was looking to speak to potential investors both locally and abroad after appointing an appraiser. Share trading in Rongsheng, the country’s largest private shipbuilder, has been suspended in Hong Kong since Aug. 29, as the government seeks outside support for the heavily indebted firm. Rongsheng is one of the largest employers in eastern Jiangsu province. Thousands of workers were laid off last year at the yard in Jiangsu, which builds Brazilian miner’s Vale mega-iron ore carriers, as Rongsheng flirted with insolvency. It later avoided this by agreeing with banks to extend its loan deadlines. The company said late on Monday that it had continued to receive support from its banks. Saving Rongsheng has become a test for China’s government, which has made reforming bloated industries one of its goals. The Jiangsu yard was recently put on a government “white list” of yards that it deems worthy of favourable policy support. Its restructuring also comes as the global shipping industry is trying to shake off an overcapacity glut that has hit newbuild orders. Rongsheng’s losses widened to 3.1 billion yuan ($504.53 million) in the first half, with current liabilities exceeding its assets by 12.3 billion yuan at the end of June, it said.

Following a billion-dollardeficit, China"s biggest state-ownedshipyard, Rongsheng, is now in the midst of a comprehensive restructuring process that is expected to be completed by the summer 2015.

The biggest state-owned shipyard in China, Rongsheng, has now initiated a long-awaited restructuring process that is expected to be completed by June next year, according to Reuters.

The recent IPO frenzy and good secondary market performance for new share issues has prompted some issuers to revive earlier listing plans. China Rongsheng Heavy Industries, one of the largest shipbuilders in China, kicked off the bookbuilding yesterday for an initial public offering of between HK$12.77 billion and HK$17.67 billion ($1.65 billion to $2.27 billion) in Hong Kong.

If successful, Rongsheng’s offering will be one of the largest IPOs in Hong Kong this year following Agricultural Bank of China’s $22.1 billion share sale and AIA’s $20.5 billion listing.

China’s new economic blueprint is not favouring heavy industry plays. In its 12th five-year plan, the government hopes to address issues like pollution and economic inequalities, which are both caused by years of aggressive investment in the country’s heavy industry – a sector which is capital-intensive but creates few jobs and has made wage increases in China lag behind GDP growth.

Rongsheng’s bigger state-owned rival, Guangzhou Shipyard International, is the largest shipyard listed in Hong Kong and has seen its share price surge more than 30% so far this year. It trades at about 11 times 2011 estimated earnings, according to data from Bloomberg.

Four cornerstone investors have shown their confidence in Rongsheng with a commitment to buy an aggregate $155 million of shares in the IPO. Shining East, a wholly-owned subsidiary of China National Offshore Oil Corporation, has agreed to subscribe to $40 million worth of shares; China Life Insurance, the nation’s biggest life insurer, will invest $50 million; China Southern Fund, a Chinese open-ended fund, will buy $35 million worth; and Atlantis, an independent investment boutique, has agreed to purchase $30 million of stock.

Earlier this year we had the opportunity to visit China Rongsheng Heavy Industries, one of China’s leading shipbuilding companies.  Rhongsheng was founded in 2005 and floated in November 2010 on the back of winning an enormous order from Vale to build twelve ore carrier vessels each 360 metres long, 65 metres wide and 30.4 metres deep with a deadweight tonnage of 400,000.  The ambitious founder, 46% shareholder and Chairman, Zhang Zhi Rong, was desperate to challenge the global leaders, South Korean based, Hyundai Heavy Industries and Daewoo Shipbuilding & Marine.

Back in 2008, Rongsheng represented all that is good and bad in China.  With Government support, Chinese corporate support, recently announced offshore diversification and the cost of shipping dry goods such as grain, coal and iron-ore at US$55,000 per day, the outlook was superb.

Let’s fast forward to July 2012 and the price of Rhongsheng’ shares have declined from HK$8 to HK$1.  For the six months to June 2012, China’s 1,536 shipyards have announced a combined 50% decline in orders.  The cost of shipping dry goods has crashed to sub US$10,000 per day (-82%), and Rhongsheng is experiencing a number of operational and credibility issues.

With the global slump in ship orders caused by a glut of vessels, Rongsheng is trying to diversify from shipbuilding and earlier this year they won a contract to build an offshore support vessel for CNOOC, one of China’s largest government controlled oil production and exploration companies.

The development of China has seen some extraordinary national champions in industries like ship building, however we wonder how many of these companies will ultimately become global champions.  With several front page newspaper disasters associated with misfeasance, we continue to be wary of China’s corporate governance record.

Rongsheng Heavy Industries Group Holdings Ltd"s shares have been suspended on the Hong Kong Stock Exchange after a media report said that the company cut 8,000 jobs in recent months.

The Jiangsu-based company - China"s largest private shipyard - has been hit by a slowdown in the global shipping industry as well as sluggish domestic demand for new ships.

Last year, Rongsheng Offshore & Marine was established in Singapore to seek new market growth points. Its business segments include shipbuilding, offshore engineering, marine engine building and engineering machinery.

"In 2011, the market was so-so, but 2012 was bad and the situation this year is cruel," said Li Aidong, president of Daoda Heavy Industry Group, an 8,000-worker shipyard in Jiangsu.

"Chinese shipyards of all sizes have been hit hard in the past two years, and they often lack the technology and bank loans needed to produce the sophisticated vessels sought in many new orders," Li said.