The receiver of bankrupt Nantong Mingde Heavy Industry believes that financial troubles engulfing Shenzhen-listed shipbuilder Sainty Marine are too grave to include the company in Migde’s restructuring plan, stripping it from the qualification to take over the yard as initially planned.
The decision was based on the fact that the potential inclusion of Sainty Marine in the restructuring package might jeopardize the reforming process of Mingde Heavy and the fact that the yard could not mobilize enough funds to back Mingde’s bailout. Sainty Marine has also lost the right to manage the yard’s restructuring process.
Sainty Marine launched Mingde’s restructuring in December, 2014, when the insolvent company filed for court receivership. It became Migde’s largest creditor having injected around USD 403.2 million to finance the newbuildings under construction at the yard in 2013 which Mingde was unable to pay back.
The announcement follows Nantong Mingde Heavy Industry failure to submit its restructuring plan to the Nantong People’s court.
China’s bankruptcy law stipulates that administrators or debtors must submit a draft reorganization plan within six months of the court’s acceptance of the restructuring plan.
The court now has an option to push the deadline for additional three months.
Earlier this year Sainty Marine said that Mingde is experiencing difficulties with respect to the delivery of 32 newbuilding units due to the latter’s ongoing restructuring process.
Sainty Marine has been struggling with financial hurdles over the recent period which saw freezing of its assets by banks in addition to defaulting on its bank loans.
World Maritime News Staff