CHINESE shipbuilder JES International Holdings on Wednesday said that it intends to restructure the group's assets and liabilities through a scheme involving its loss-making subsidiary, Jiangsu Eastern Heavy Industries (JEHI), and its creditors.
As a result, trading in the shares of the company has been suspended.
JEHI has filed an application to Taizhou Intermediate People's Court in Jiangsu for the restructuring scheme. If JEHI is successful in its application, a manager will be appointed by the court to oversee the restructuring.
"In recent years, due to a decline in the shipbuilding industry as well as inadequate internal management, JEHI has sustained significant financial losses. Particularly, JEHI is impaired by its severe lack of liquidity and cash flow," the company said in a statement.
"If JEHI's application is successful, no other creditors will be able to commence a winding up application as against JEHI, and negotiations will be carried out by the management of JEHI at the oversight of the manager."
It separately announced that negotiations with sellers linked to an acquisition of 51 per cent of Scibois Co Limited, a timber extraction company, have "irrevocably broken down". The deal, announced last year, has been terminated.
In a third announcement, JES said that it has terminated a share placement deal involving investment holding firm Brilliant Choice International and private investor Sun Yiyi. This deal, announced in January this year, would have meant JES International placing out shares that stood for 15.5 per cent stake in the company. The deal was called off in light of JES's proposed restructuring, the company said.
Shares in JES last traded at S$0.026.