Shenzhen-listed shipbuilder Sainty Marine sank to losses of CNY1.8 billion (USD292 million) in 2014 on huge asset impairment that resulted from its loans extended to shipbuilder Nantong Mingde Heavy Industry.
For 2014, the company took a provision of CNY1 billion for non-performing loans it had extended to Nantong Mingde previously, a stock filing of the company said on 29 April.
As of the end of 2014, Sainty Marine provided Nantong Mingde with a total of net CNY2.5 billion for the building costs of the newbuildings under construction at the Nantong yard, making Sainty Marine the single largest creditor of the Nantong yard.
The Nantong yard has entered court receivership since Sainty Marine applied for the bankruptcy restructuring of Nantong Mingde in December 2014. Sainty Marine seeks to take over the shipbuilding assets and business of Nantong Mingde after the bankruptcy restructuring is completed successfully in five to seven months from December 2014.
In addition, Sainty Marine’s finance cost surged 147% year on year (y/y) to CNY250.6 million in 2014 due to jump in borrowings from the banks.
Sainty Marine’s revenue rose 1.6% y/y to CNY3 billion in 2014.
The company predicted that it would drop into the red with losses between CNY118.7 million and CNY160 million in the first half in 2015 due to higher finance cost.
In the first half in 2014, the company posted profit of CNY41.3 million.
This post was sourced from IHS Maritime 360: View the original article here.
