china rongsheng heavy industries group holdings for sale

Last October, the company entered into an agreementto sell 98.5% equity interest of Rongsheng Heavy Industries, the entire interest in Rongsheng Engineering Machinery, Rongsheng Power Machinery and Rongsheng Marine Engineering Petroleum Services, to Unique Orient, an investment holding company owned by Wang Mingqing, a creditor of Huarong Energy, for a nominal price of HK$1.

Once the largest private shipyard in China, Rongsheng ceased shipbuilding operations in 2014 after it was hit by a major financial crisis and the shipyard rebranded into Huarong Energy in 2015.

(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.

China Rongsheng Heavy Industries Group Holdings Ltd., the shipyard that has become symbolic of a credit glut gone wrong, said a spate of canceled orders led to

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

China Rongsheng Heavy Industries Group Holdings Ltd., once the country’s largest private shipyard, said it will not proceed with a proposed warrant sale

China Rongsheng Heavy Industries Group, the country"s largest private shipbuilder, said its first-half net loss widened more than ten times as shipowners

Private-sector shipyards such as Rongsheng Heavy Industries and China Ocean Shipbuilding Industry Group Ltd report another very tough year of losses in 2013

By Adam Jourdan and Keith Wallis RUGAO, China/SINGAPORE, Dec 6 (Reuters) – Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun

China Rongsheng Heavy Industries Group, the country"s largest private shipbuilder, said on Wednesday it expects to report a substantial full-year loss just

Rongsheng Heavy Industries announced in a stock filing today their plan to issue HK$1,400,000,000 (USD $180 million) in convertible bonds in an effort to help

HONG KONG/SINGAPORE, July 11 (Reuters) – A court has granted a unit of China Rongsheng Heavy Industries approval to proceed with legal action to reclaim

China Rongsheng Heavy Industries Group, China"s largest private shipbuilder, appealed for financial help from the Chinese government and big shareholders on

As forewarned in December, Chinese shipbuilder Rongsheng Heavy Industries, posted a 2012 loss of USD $92 million, the opposite of the $90 million profit they

HONG KONG, March 25 (Reuters) – China Rongsheng Heavy Industries Group Holdings Ltd won its first orders to build two jack-up rigs worth more than $360

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.

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.

HONG KONG (Reuters) - Shares in China Rongsheng Heavy Industries Group Holdings Ltdtumbled 16 percent on Monday after the U.S. securities regulator accused a company controlled by the shipbuilder"s chairman of insider trading ahead of China"s CNOOC Ltd"sbid for Canadian oil company Nexen Inc.Labourers work at a Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province May 21, 2012. REUTERS/Aly Song

The U.S. Securities and Exchange Commission filed a complaint in a U.S. court on Friday against a company controlled by Rongsheng Chairman Zhang Zhirong, and other traders, accusing them of making more than $13 million (8.2 million pounds) from insider trading ahead of CNOOC’s $15.1 billion bid for Nexen.

“The news around the chairman comes on the back of other operational and credibility issues,” Barclays said in a note to clients. “We think China Rongsheng presents significant company-specific risk.”

In a filing with the Hong Kong stock exchange, Rongsheng - which entered a strategic cooperation agreement with CNOOC in 2010 - said it did not expect the U.S. investigation to affect its operations. It said Zhang did not have an executive role in the company.

Rongsheng, controlled by Zhang, also issued a profit warning on Monday, saying first-half earnings would fall sharply as a result of the shipbuilding downturn.

Zhang was ranked the 22th richest Chinese person by Forbes Magazine in September 2011. But his net worth fell by more than half in the past year to $2.6 billion in March 2012 as shares of Rongsheng tumbled.

Shares of Glorious Property Holdings Ltd, a Chinese real-estate developer controlled by Zhang Zhirong, also fell sharply. The stock was down 12.9 percent as of 0304 GMT.

CNOOC said on July 23 it had agreed to acquire Nexen for $15.1 billion, China’s biggest foreign takeover bid. Shares of Nexen jumped almost 52 percent that day.

The unnamed Singapore traders used accounts in the names of Phillip Securities and Citibank C.N, while Well Advantage made its trades through accounts held at UBS Securities and Citigroup Global Markets. Neither of the Well Advantage accounts had traded Nexen shares since January 2012, and the Citigroup account had been completely dormant for over six months, the SEC says.

China Rongsheng Heavy Industries Group Holdings Limited is planning to sell its stake. China Rongsheng Heavy Industries Group is seeking investments from private equity funds.

The company said that the struggles of its shipbuilding arm, Jiangsu Rongsheng Heavy Industries, had been hampering efforts to expand in energy services

China Rongsheng Heavy Industries Group Holdings Limited [1101.HK] has announced that it has signed a memorandum of understanding that will see its shipbuilding business, Jiangsu Rongsheng Heavy Industries, sold to an undisclosed potential purchaser.

According to the company, the depressed shipbuilding market had led to operational difficulties at Jiangsu Rongsheng Heavy Industries, while its highly-leveraged state was also interfering with the company"s efforts to expand in oil and gas exploration elsewhere.

"The Potential Transaction shall adjust and optimize the assets and business of the Group, and divest the relevant assets and liabilities of the shipbuilding business and offshore engineering business, which shall help to ease the debt burden of the Group, enhance the flexibility of fund utilization, better implement the strategy of business transformation and transformation into an energy service provider focusing in the oil and natural gas market," said the company.

It was reported in 2012 that in the face of market difficulties, China Rongsheng Heavy Industries had turned its focus to building containerships with a "green design" as one its key products.

The shipyard of China Rongsheng Heavy Industries Group Holdings Ltd in Rugao, Jiangsu province. The company will generate HK$2.55 billion ($326.4 million) in a share sale in the next six months and HK$3.23 billion thereafter. [Provided to China Daily]

China Rongsheng Heavy Industries Group Holdings Ltd, the private-sector shipbuilder that had sought financial assistance, has secured cash for restructuring and announced changing the company"s name as it shifts focus to energy.

Shifting its focus to oil will need a lot more funds, which Rongsheng already struggled to get as a shipbuilder, said Francis Lun, chief executive officer of Geo Securities Ltd.

The company had sought help from the government to benefit from a rebound in China"s shipbuilding industry after cutting its workforce and running up huge debts amid a global downturn in orders.

In September the Jiangsu shipyard unit was listed among 51 shipbuilding facilities in China deemed worthy of policy support as the industry grapples with overcapacity.

Rongsheng said it has now received the results of an appraisal by an independent assessor, which will be used as the basis for the restructuring in which it also plans to change its name to China Huarong Energy Co to more accurately reflect its expansion and new business scope.

The China Rongsheng Heavy Industries (RSHI) Group Holdings is a leading large-scale heavy industry conglomerate with operations covering shipbuilding, marine engineering, power engineering, construction machinery and other related fields. The China RSHI Group was successfully listed on the Main Board of The Stock Exchange of Hong Kong on 19th November 2010.

Liang studied for a Master’s in Corporate Management at Tongji University and undertook a period of work experience at Berlin Technical University. He is Deputy Treasurer at China Rongsheng Heavy Industries Group Holdings.

Rongsheng has a vertically centralised treasury structure. We have two production bases located respectively in Rugao, Nantong and Hefei, Anhui Province. The group headquarters are in Hong Kong and Shanghai, with treasury department composed of seven employees, responsible for FX and interest rate risk management, financing, cash management and bank relationship management.

Our main cash management banks include Bank of China, the Export-Import Bank of China and China Development Bank, which are also our biggest credit banks.

The ship-building industry differs significantly from ordinary manufacturing industries in that even a single product can have great value and the building cycle is very long. Therefore, during the building process the shipyard will authorise a bank to issue a refund guarantee to the ship-owner based on building milestones. Currently, the guarantee issuing banks that are most acceptable to overseas ship-owners are Bank of China, the Export-Import Bank of China and China Development Bank.

Meanwhile we also leverage the combined advantages of different banks, such as the trade financing of Bank of China, the project loans of China Construction Bank, and the project mortgage of China Everbright Bank.

Due to the nature of our industry, we are not able to physically pool our cash yet, because most of our collections have to be swept to the specified account of ship-building business. However, we do use centralised management to get a real-time understanding of group cash position and future cash flow.

HONG KONG, June 28, 2011 - (ACN Newswire) -China Rongsheng Heavy Industries Group Holdings Limited ("China Rongsheng Heavy Industries" or the "Group"; SEHK: 1101), announced that Rongsheng Machinery Limitied ("Rongsheng Machinery")(previously Anhui Rongan Heavy Industries Machinery Company Limited), its new plant in Hefei, has commenced production today and the Group"s first-ever excavator has also been produced on the same day.

Officiating at the plant"s opening ceremony were leaders of the Hefei Municipal Government as well as top management of the Group including Mr. Deng Hui, Executive Director of China Rongsheng Heavy Industries and Mr. Yu Zheng, Chairman and President of Rongsheng Machinery Limited. Suppliers and agents of Rongsheng Machinery also attended the ceremony that day. Rongsheng Machinery also formally signed contracts with suppliers and agents at that time and completed the sale of its first dynamic compactor.

Mr. Chen Qiang, Chief Executive Officer and Executive Director of Rongsheng, said, "With the new Hefei plant, the Group is boosting its engineering machinery business, further implementing diversification of its four major business segments while enlarging its share of RMB-denominated business. Through its diversification strategy, China Rongsheng Heavy Industries has kept in step with the industrial planning policy of Anhui Province to develop Hefei into a "City of Engineering Machinery". Also, guided by its own overall strategy of "co-developing the marine and offshore businesses", the Group has entered into the engineering machinery market by acquiring a majority equity interest in Hefei Zhenyu Enginnering Machinery Company Limited ("Zhenyu Engineering Machinery") in March 2010. The Group has also established and registered Rongsheng Machinery in the same month. It has actively expanded its production base with an aim to increase production capacity."

Rongsheng Machinery"s new plant is located in Hefei Economic and Technology Development Zone. The excavator project covers an area of approximately 850 acres. The construction began in November 2010 with production commencing on 28 June 2011. The project was completed in just over than seven months, much shorter than the industry average of 18 months for constructing a general assembly workshop. It indeed has set a standard for engineering construction across the industry.

The Group believes that urbanisation and infrastructure investment in railways, highways and utilities in China will continue. Consequently, this will create enormous demand for the engineering machinery segment, especially excavators, and thus a rapid growing phase for the industry together with opportunities for emerging producers are expected.

Rongsheng Machinery"s small excavator production line has commenced operation on 18 May this year, and its engineering machinery business is entering a stage of comprehensive development. The new production facility will have a production capacity of 30,000 hydraulic excavators. Every stage of the excavator production base project, from proposal, and submission for approval to preparation for construction, has enjoyed the close attention and strong support from all levels of leaders in the province and the city as well as the economic development zone. Anhui Provincial Government has designated the project as a major construction project in its "861 Action Plan". The Hefei Municipal Government has also included it as a major implementation project under the Twelfth Five-Year Plan.

Rongsheng Machinery currently produces 16 varieties of hydraulic excavators and two varieties of hydraulic crawler cranes. While constructing a new production base, Rongsheng Machinery has also shifted from direct sales outside province to distribution, increasing the number of its distributors to 10. Rongsheng Machinery has also enhanced its cooperation with financial institutions. In addition, the acquisition of Quanchai Group in April this year has enabled it to secure a stable supply of engines for the engineering machinery segment.

Development of the engineering machinery business will also facilitate China Rongsheng Heavy Industries to increase its RMB-denominated business as an effective means to combat against foreign exchange risk. Mr. Chen Qiang said, "Given the continued appreciation of the RMB compared to the US dollar, the Group will actively expand the shipbuilding and engineering machinery businesses in the PRC. The Group intends to establish a RMB settlement business, with the comprehensive development of the engineering machinery business, the Group is expected to have a more diversified income stream and achieve a more balanced mix of RMB- and US dollar-denominated income."

Since the acquisition of Zhenyu Engineering Machinery in March 2010, the engineering machinery business has contributed a total revenue of RMB327.3 million to the Group, mainly derived from the sale of excavators and crawler cranes.