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SHANGHAI, March 5 (Reuters) - China Rongsheng said it had scrapped a warrant issue that would have given the heavily indebted shipbuilder a HK$3 billion ($416 million) cash lifeline after it was unable to contact the offer’s only subscriber.

Rongsheng’s shares fell as much as 8.1 percent in early Thursday trade, after it said it would no longer issue HK$510 million worth of warrants to Kingwin Victory Investment Ltd, a Cayman Islands-incorporated investment firm.

In a stock exchange filing, Rongsheng said it had scrapped the issue as it could not contact Kingwin’s owner Wang Ping after media reports said he had been detained by the Beijing police for matters not related to Rongsheng.

“The company has no information as to the details of the incident and has been unable to contact Mr. Wang Ping, which casts doubt over the ability of the subscriber to perform its obligations,” Rongsheng said.

Rongsheng, one of China’s largest shipbuilders, was gearing to move into oil exploration and change its name after becoming one of the most prolific casualties of the global shipping slump. It came close to insolvency in 2013 before agreeing with banks to extend its loans until the end of this year.

The warrant issue that Rongsheng had agreed with Kingwin in October would have entitled subscribers to buy up to 1.7 billion new shares at HK$1.60 each.

This would have raised about HK$3.23 billion for Rongsheng, the firm said at the time. A warrant entitles the holder to buy stock from the issuer at a specific price within a time frame. ($1 = 7.7552 Hong Kong dollars) (Reporting by Brenda Goh; Editing by Miral Fahmy)

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.

“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.

Guangdong Rongsheng Electric Holding Co., Ltd. is a professional home appliance supplier, such as deep fryers, meat slicers, disinfection cabinets, range hoods, gas burners, water heaters, rice cookers, induction cookers, fans and sinks. We integrate design, production and manufacture as a whole, and always provide clients with favorable prices, high quality products as well as the best service.Rongsheng is located in Ronggui Town, Shunde District, Foshan City, the economic center of the Zhujiang River Delta. Since the foundation in 1981, Rongsheng has become a well-known brand. All the goods are popular both at home and abroad.Our company enjoys abundant human, finance & material resources:* More than thousands of competent staff members, including about 300 overseas or domestic graduates with the honor of bachelor"s degree or above* Fixed assets of 50 million USD, building area of more than 50, 000 square meters * Annual production capability of 10 million units for domestic and overseas markets * More than 30 years of experience of metal processing (Stamping and punching)* More than 10 years of experience of OEM electrical appliances* Advantage of making tools in house and lower tooling cost* ETL, GS, CE, CB, LFGB, EMC, EMF, RoHS and REACH approvals by authorized international test labs.We are professional in the field. "Choose Rongsheng, you will be happy for lifetime" is our slogan!

Twenty companies on the list had operating revenue exceeding 100 billion yuan. The top three in this regard were Alibaba (717.28 billion yuan), Geely (325.6 billion yuan), and Rongsheng (308.6 billion yuan).

The Guangdong Rongsheng Electrical Appliance Company held a ceremony announcing the donation of water purifiers to Tanghe county, Nanyang, Henan province, on April 13.

Jerry Liu, the vice-president of global marketing for Hisense, said the company gained the most core resources in block ads and score pop-ups in terms of rights activation. Its sub-brands Rongsheng, Kelon, gorenje, Toshiba and Regza were all authorized to appear in sideline advertisements during matches at the championship.

There are a total of 45 new and re-listed companies in the Fortune Global 500 ranking this year, of which 18 are new and re-listed Chinese companies, including China State Shipbuilding Corp, Zhejiang Rongsheng Holding Group, Zhejiang Hengyi Group, and Sunac China Holdings Co.