Shenzhen-listed Sainty Marine has called a halt to its plan to take over insolvent Nantong Mingde Heavy Industry (NMHI) due to lack of funds.
After repeated studies, Sainty Marine had found it was unable to allocate funds to continue to support the restructuring of NMHI, a stock filing of the company said. Sainty Marine is the single largest creditor of NMHI.
Meanwhile, NMHI is seeking new potential investors to take over the yard, according to an earlier statement of NMHI. “If NMHI can not find new investors, NMHI will enter into the liquidation process,” Sainty Marine said.
Earlier this month, Sainty Marine was stripped of the qualification for the takeover of NMHI by NMHI’s receiver as the company had sank to financial troubles.
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NMHI has entered into court receivership since Sainty Marine applied for the bankruptcy restructuring of NMHI in December 2014.
Sainty Marine has been in cooperation with NMHI to sell newbuilds built by NMHI since 2013. As of end of 2014, Sainty Marine provided NMHI with a total of net CNY2.5 billion (USD403.2 million) to finance the buildings of the newbuildings under construction at NMHI, making Sainty Marine the single largest creditor of the Nantong yard.
Sainty Marine found by the end of 2014 that NMHI was unable to repay the funds as the company had predicted.