Asia/Pacific News
Chinese Shipbuilder Sainty Marine Begins Bankruptcy Restructuring on Market Woes
China's state-owned Sainty Marine Corp Ltd (Sainty Marine) Wednesday announced that the Nanjing Intermediate People's Court accepted the firm's application for bankruptcy and reorganisation, making the company the first listed shipbuilder in the country to do so, Chinese media reports.
Pointing to weak demand and low prices on the international market, Sainty Marine said in January that losses were likely to reach 5.8 billion yuan ($890 million) for the 2015 year, up from 1.8 billion yuan ($280 million) in 2014.
With 15 of Sainty Marine's bank accounts said to have been frozen, court documents from February 14 are reported to show that the company has defaulted on 865 million yuan ($132.43 million) worth of debts it owed to several Chinese banks.
Following the company's August 6, 2015 suspension of trading on the Shenzhen Stock Exchange, Sainty Marine's debts had risen to 8.3 billion yuan ($1.27 billion) as of September 30, according to a 2015 third quarter earnings statement.
The company's shipyards are said to have halted operations last week, having already cut its staff from 1,188 at the beginning of 2015 to just 114.
"Workers are still being paid, but many are planning to leave because we are not sure how long the company can hold out," a Sainty Marine employee is reported to have said.
Sainty Marine is understood to have received no orders during the 2015 year, and saw 6 billion yuan ($920 million) in cancelled orders during 2014.
In addition, a failed venture with the now bankrupt Nantong Mingde Heavy Industry Stock Co. Ltd, is reported to have lost the company a further 2.9 billion yuan ($440 million).
Last week, Golden Ocean Group Ltd. (Golden Ocean) CEO Herman Billung said that, in addition to scrapping and idling, ship owners looking for ways to help weather the historically dire markets are cancelling or delaying newbuild orders and deliveries.
