rongsheng chen price

Rong Sheng Chen occupies the position of Chairman & President at Tatwah Smartech Co., Ltd., Chairman at Xindong Network Technology Co., Ltd. and Chief Executive Officer at Fujian New Doone Science & Technology Co., Ltd. (both are subsidiaries of Tatwah Smartech Co., Ltd.) and Chairman for K.H. Group Holdings Ltd.

HONG KONG (Reuters) - Jiangsu Rongsheng Heavy Industries Co Ltd has appointed Morgan Stanleyand JP Morganto finalize plans for its long-awaited IPO in Hong Kong, aiming to raise up to $1.5 billion in the fourth quarter, sources told Reuters on Tuesday.

This is Rongsheng’s latest bid to go public after it failed to raise more than $2 billion from a planned IPO in Hong Kong in 2008, mainly as a result of the global financial crisis.

Rongsheng"s early main shareholders included an Asia investment arm of Goldman Sachs, U.S. hedge fund D.E. Shaw and New Horizon, a China fund founded by the son of Chinese Premier Wen Jiabao.

The three investors sold off their stakes in Rongsheng for a profit early this year, said the sources familiar with the situation. Representatives for the banks, funds and Rongsheng all declined to comment.

Rongsheng’s revived IPO plan comes at a challenging time. Smaller domestic rival, New Century Shipbuilding, slashed its Singapore IPO in half last week, planning to raise up to $560 million from the originally planned $1.24 billion due to weak market conditions.

Given uncertainty in the global shipbuilding business environment as well as growing concerns over a huge flow of fund-raising events in Hong Kong, investment bankers suggest the potential size for Rongsheng could be $1 billion to $1.5 billion, according to the sources.

Rongsheng is seeking to tap capital markets to fund fast growth and aims to catch up with bigger state-owned rivals such as Guangzhou Shipyard International Co Ltd.

Rongsheng won a $484 million deal to build four ships for Oman Shipping Co last year. The vessels would carry exports from an iron ore pellet plant in northern Oman which is expected to begin production in the second half of 2010.

SHANGHAI (Reuters) - Goldman Sachs Group Inc and other overseas funds are close to finalizing a deal to buy a minority stake in Chinese shipbuilder Rongsheng Heavy Industries Group for about $600 million, sources familiar with the situation said on Monday.

“Rongsheng wants to bring in strategic investors before its initial public offering (IPO) of shares. Goldman and some other foreign funds have expressed an interest in it,” one of the sources, who declined to be identified, told Reuters.

Another source confirmed the Wall Street bank was among potential investors of Rongsheng, which is based in the eastern port city of Nantong, near Shanghai, and that an agreement had been reached on price, although the final documents had not yet been signed.

In April, privately held Rongsheng’s president Chen Qiang told Reuters that his company may sell a 20 to 25 percent stake to foreign investors prior to an overseas IPO as early as 2009.

“The deal is close to being finished and Goldman is also expected to sponsor Rongsheng’s IPO next year,” said the second source, adding that Rongsheng was considering the Hong Kong stock market as one option for its IPO.

Rongsheng, which aims eventually to compete with much bigger state-owned rivals such as Guangzhou Shipyard International Co, is joining many of its peers in seeking to tap the capital markets to fund rapid expansion, which has been fuelled by China’s booming global trade.

While expanding its product profile into crude oil tankers and container ships, Rongsheng is exploring opportunities in the maritime engineering sector to help offset a possible downturn in the cyclical industry, which may level off in the next few years.

Rongsheng was also in talks with several potential clients in the offshore engineering sector, including the country’s dominant offshore oil developer CNOOC Ltd., and hopes to land big-ticket orders soon, Chen told Reuters in April.

Rongsheng has borrowed billions of dollars in debt since its launch in 2005, fueling a rapid expansion that has made it one of China"s biggest three shipbuilders. But a global slowdown in demand for new vessels over the past few years has hit the firm hard.

In July Rongsheng, which is owned by private investors, said it was in discussions with a number of banks about "renewing existing credit facilities." The company also said it has reached an accord with a company controlled by key shareholder

Trading of shares and all structured products related to the company was suspended pending clarification of “news articles and possible inside information,” Rongsheng said in filings to the Hong Kong stock exchange. The Wall Street Journal reported yesterday, citing Lei Dong, secretary to the Shanghai- based company’s president, that more than half of the employees laid off were subcontractors and the rest full-time workers.

Rongsheng shares slumped 10 percent yesterday after the company said some idled contract workers had engaged in “disruptive” activities by surrounding the entrance of its factory in east China’s Jiangsu province. China’s shipyards are suffering from a global slump in orders as a glut of vessels and slowing economic growth sap demand. Brazil and Greece accounted for more than half of Rongsheng’s 2012 revenue.

“Rongsheng’s move reflects the bad market,” said Lawrence Li, an analyst at UOB-Kay Hian Holdings Ltd. in Shanghai. “More small-to-medium sized shipyards, especially those that lack government support, may take the same actions or even close down.”

Rongsheng spokesman William Li declined to comment on the Journal report. Four calls to Lei’s office at Rongsheng went unanswered. Rongsheng Chairman Chen Qiang also declined to comment today.

Rongsheng had as many as 38,000 workers including its own employees and contract staff at the peak of the industry boom a few years ago, UOB-Kay Hian’s Li said.

China Rongsheng posted a loss of 572.6 million yuan ($93 million) last year, after three consecutive years of profits, according to data compiled by Bloomberg. It had short-term debt of 19.3 billion yuan as of the end of 2012, the data show.

The shipbuilder targets new ship and offshore orders worth more than $2.3 billion this year, Chen said in Hong Kong in March. The shipbuilder pared about 3,000 employees last year as it aims to return to profit this year, he said at the time.

Rongsheng received orders to build a total of 16 Valemax vessels from Brazilian miner Vale SA and Oman Shipping Co. and had delivered 10 as of April. The commodity ships, among the biggest afloat, are about twice the size of the capesize vessels that have traditionally hauled iron ore from Brazil to China.

The company’s cash conversion cycle, a gauge of days required to convert resources into cash, more than doubled to 582 last year from 224 in 2011, the data show. China Rongsheng shares have fallen 15 percent this year in Hong Kong, compared with a 11 percent decline for the benchmark Hang Seng Index.

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