China Rongsheng suffers another year of losses

[HONG KONG] China Rongsheng Heavy Industries Group, the country's largest private shipbuilder, posted a second straight annual loss yesterday due to shrinking orders and said that it was in talks with 10 Chinese banks about the repayment of loans.

Analysts have said that Rongsheng could be the biggest casualty of a local shipping industry suffering from overcapacity during a global shipping downturn, amid mounting concerns of defaults in China as a credit crunch takes a toll.

Rongsheng said that the group's borrowings included 127 million yuan (S$25.7 million) that was overdue and had not been renewed or repaid. Its total borrowings and finance lease liabilities stood at 22.41 billion yuan, of which 13.71 billion yuan is due within 12 months. "We have signed a framework agreement with over 10 principal banks to establish a debt optimisation syndicate, for the purpose of ensuring our stability of operations and improving our state of liquidity," Rongsheng said in a statement.