rongsheng cease shipbuilding quotation

HONG KONG, July 5 (Reuters) - China Rongsheng Heavy Industries Group, China’s largest private shipbuilder, appealed for financial help from the Chinese government and big shareholders on Friday after cutting its workforce and delaying payments to suppliers.

Analysts said the company could be the biggest casualty of a local shipbuilding industry suffering from overcapacity and shrinking orders amid a global shipping downturn. New ship orders for Chinese builders fell by about half last year.

Hours after China Rongsheng made its appeal in a filing to the Hong Kong stock exchange, where the company is listed, Beijing vowed to bring about the orderly closure of some factories in industries plagued by overcapacity.

The statement by the State Council, or cabinet, laid out broad plans to ensure banks support the kind of economic rebalancing Beijing wants as it looks to focus more on high-end manufacturing. It did not mention any specific industries or companies and there was no suggestion it was referring to Rongsheng.

China Rongsheng said it was expecting a net loss for the six months that ended June 30 from a year earlier, according to the filing. It gave no figures.

Rongsheng shares plunged 16 percent to a record low in heavy turnover on Friday, leaving its market capitalisation at just under $1 billion. The Hang Seng Index climbed 1.9 percent. China Rongsheng is down 28.2 percent on the year.

In its filing, China Rongsheng said some workers had been made redundant, although it gave no numbers or timeframe for the losses. The company did not immediately respond to requests for more information.

China Rongsheng has said it won only two shipbuilding orders worth $55.6 million last year when its target was $1.8 billion worth of contracts. This year, it received orders to build two drilling rigs used in oil exploration, worth $360 million.

By contrast, another Chinese shipbuilder, Singapore-listed Yangzijiang Shipbuilding (Holdings) Ltd, has secured total orders of $1 billion in the first half, Barclays said.

While the Chinese shipbuilding industry faced “unprecedented challenges”, China Rongsheng’s board was confident management could ease pressure on working capital in the near future and maintain normal operations, the company said in the filing.

According to its December 2012 annual report, issued on March 26, China Rongsheng’s cash and cash equivalents fell to 2.1 billion yuan from 6.3 billion yuan a year ago.

“The group is ... actively seeking financial support from the government and the substantial shareholders of the company, and increasing its efforts in negotiations with its customers to maximise the collection of receivables,” China Rongsheng said in the filing.

A note from Macquarie Equities research said the statement highlighted the “severity” of China Rongsheng’s liquidity problems, adding this was not necessarily representative of the wider sector.

It said other listed Chinese shipyards were not as leveraged as China Rongsheng. The loan from Zhang was a surprise, it said, showing how badly the company needed cash.

“Rongsheng will need to address the problems immediately to reassure the market,” said Martin Rowe, managing director of Clarkson Asia Limited, a global shipping services provider.

The Chinese government has been trying to support the domestic shipping industry since the 2008 financial crisis, and local media reports said this week Beijing was considering policies to revive the shipbuilding business.

The holding orders of Chinese shipyards dropped 23 percent in the first five months of this year compared with a year earlier, according to the China Association of the National Shipbuilding Industry. New orders dropped to a seven-year low in 2012. ($1=6.1258 yuan) (Additional reporting by Yimou Lee and Twinnie Siu in Hong Kong and Keith Wallis in Singapore; Editing by Dean Yates)

SHANGHAI, Aug 29 (Reuters) - China Rongsheng Heavy Industries Group, the country’s largest private shipbuilder, said its first-half net loss widened more than ten times as shipowners continued to postpone vessel deliveries amid a prolonged industry slump.

Rongsheng reported a net loss of 3.1 billion yuan ($505 million) for the first half, compared to a loss of 285 million yuan in the same period last year.

Rongsheng said it entered new shipbuilding contracts for six vessels worth a combined $167.4 million over the first half. As of June 30, it had an order book of 90 vessels, representing a total contract value of $4.2 billion.

(18 May 2014, Hong Kong) - China Rongsheng Heavy Industries Group Holdings Limited ("China Rongsheng Heavy Industries" or the "Group"; stock code: 01101.HK), a large heavy industries group in China, has signed a shipbuilding contract for a series of

64,000 DWT bulk carriers with a European shipowner. The shipbuilding contract will increase the total number of vessels involved between the two parties to 36. Including options, the shipbuilding contract is worth approximately USD1 billion.

The shipbuilding contract involves not more than 36 of 64,000 DWT bulk carriers, which consist of 24 confirmed orders and 12 options. Among the 24 confirmed orders, 18 of them are existing orders with better contractual terms after renegotiation, while the remaining 6 are new orders. These vessels are scheduled to be delivered within the next three years. The 64,000 DWT bulk carrier is the smallest bulk carrier ever built by the Group in terms of its tonnage.

China Rongsheng Heavy Industries Group Holdings Limited and its subsidiaries are a leading diversified large heavy industries group in China. Our headquarters is located in Hong Kong, with manufacturing bases in Nantong (Jiangsu Province) and Hefei (Anhui Province). Rongsheng Offshore & Marine was established in Singapore to promote our offshore engineering business. Our business segments include shipbuilding, offshore engineering, marine engine building and engineering machinery. According to Clarkson Research, China Rongsheng was the largest non-state-owned shipbuilder in the PRC in terms of orders on hand measured by DWT as at the end of December 2013. The Group operates the largest shipyard in the PRC and is a global leader in the manufacture of very large ore carriers.

[Press Release]China Rongsheng Heavy Industries Secures Shipbuilding Contracts from Three Ship Owners* * * *Enhances Functions of the Vessel Models and Captures the GreenTrend in the MarketStrong Capability to Secure New Orders with Immense GrowthPotential

(3 July 2011, Hong Kong) – China Rongsheng Heavy Industries Group Holdings Limited (“China Rongsheng Heavy Industries” or the “Group”; stock code: 01101.HK), a large heavy industries group in China, is pleased to announce that it has secured large orders from three renowned shipowners in Europe recently, including four

6600-TEU containerships and ten 205,000-tonne bulk carriers.Mr Chen Qiang, Chief Executive Officer and Executive Director of China Rongsheng Heavy Industries, said, “We have secured the highest number of new orders in the country and the world’s fifth highest number of orders in hand since the end of 2010. Following the order[s] valued at USD400 million secured in the first quarter this year, we have secured several additional large orders which have notably increased the total amount of our orders in hand. These orders are sufficient to support our development in the coming few years, forming a solid foundation for our future growth. The signing of the contracts has increased the amount of new orders of the Group in the first half of the year to more than USD1.3 billion and further rationalised our order structure”.

At the same time, China Rongsheng Heavy Industries has signed contracts with two other European ship owners to provide each with two 6600-TEU containerships [respectively]. Adopting a new generation design, the 6600TEU containerships reduce the speed from 25 kn to 21 kn as well as [ballast capacity], thus saving oil consumption and lowering transportation cost.

Despite the slowdown in the global shipbuilding industry in the first half of the year, China Rongsheng Heavy Industries has stood out among its peers in the volume of new orders it has secured. This year, the Group has signed contracts with Golden Union, a well-known international shipowner, for provision of two Panamax bulk carriers in January, and 2+2 of these carriers in May. Founded in 1977, Golden Union is well-known for operating bulk carriers. Currently, Golden Union has more than 20 ships in its fleet, thus making it the leader in the dry bulk carrier transportation [industry] in Greece.

Mr Chen concluded, “Our improvement was by no means due to luck. The new orders that we just secured included some established and world renowned shipowners. These new orders represented their recognition of our rapid growth and appreciation of the top quality of our finished products, as well as their support and trust of the brand. Although the global shipbuilding market remains slow, our business has not been affected and we are boosting sustained and stable income growth as planned. In the near future, our strong ability to secure new orders should lead the industry to grow and come on the international stage. We are moving forward to become a leading heavy industries group and generate more promising returns for our shareholders and investors”.

Established in 2005, China Rongsheng Heavy Industries advanced to become a market leader in the Chinese shipbuilding industry within five years. According to Clarkson Research, China Rongsheng Heavy Industries was the second largest shipbuilder and the largest privately-owned shipbuilder in the PRC in terms of total order book measured by DWT as of end of 2010, and had the largest shipyard in the PRC. China Rongsheng Heavy Industries was also a global leader in manufacture of VLOCs of over 400,000 DWT. Headquartered in Hong Kong and Shanghai, China Rongsheng Heavy Industries has production facilities in Nantong of Jiangsu Province and Hefei of Anhui Province. Currently, China Rongsheng Heavy Industries’ business spans four segments: shipbuilding, offshore engineering, marine engine building and engineering machinery. Rongsheng products include bulk carriers, crude oil tankers, containerships, offshore engineering products, low-speed marine diesel engines and small to mid-size excavators for construction and mining uses. It has established strategic cooperations with renowned international classification societies including DNV, ABS, LR, GL and CCS, and has built a customer base including enterprises such as CNOOC, Vale, Geden Line, Cardiff Marine Inc., MSFL and Frontline Ltd. The Group’s products have been sold to 11 countries and regions including Turkey, Norway, Germany, Brazil, Singapore and China.For press enquiries:Strategic Financial Relations (China) LimitedMs. Anita CheungTel: (852) 2864 4827Email: anita.cheung@sprg.com.hk

Rongsheng admitted to Xinhua that it had terminated the contracts of those workers on low production utility rate due to a lack of new orders this year. But it denied withholding their wages.

Meanwhile, the China Shipbuilding Industry Corp (CSIC) has signalled an interest in taking over Rongsheng, subject to an attractive offer, according to a report by Chinese business newspaper 21st Century Business Herald, which quoted a source at CSIC.

Rongsheng was cast into the limelight in 2008 after it won a $1.6 billion order from Brazilian iron ore miner Vale for a dozen 400,000-deadweight-tonne very large ore carriers.

The 46-year-old Mr. Li, who gave only his surname, said he works for China Rongsheng Heavy Industries Group Holdings Ltd. The company Friday said it is struggling to pay employees and suppliers and is in talks with its bankers for more credit. Rongsheng also is seeking financial help from the government and shareholders amid a prolonged industry slump.

The 46-year-old Mr. Li, who gave only his surname, said he works for China Rongsheng Heavy Industries Group Holdings Ltd. The company Friday said it is struggling to pay employees and suppliers and is in talks with its bankers for more credit. Rongsheng also is seeking financial help from the government and shareholders amid a prolonged industry slump.

Yuanlin was quoted by the news agency as saying: "The government, banks and Rongsheng’s major shareholder all hope we can be part of the deal, but whether or not we will get in depends on the asset price.

Yuanlin said that this proposed deal will help the shipbuilder in terms of expanded capacity and assets, and also with the existing value-added offshore shipbuilding capabilities, IHS Maritime reported.

Speaking at a post-earnings briefing in Singapore, Yuanlin also said that the country’s shipbuilding industry would shrink significantly in the next three years since the number of active shipyards in China would be decreased to approximately 30 as shipping companies enter a period of consolidation.