Shenzhen-listed Sainty Marine’s parent company plans to provide about CNY200 million (USD32.3 million) to establish a united pool of funds to mitigate pressures on the company‘s cash flow.
The CNY200 million provided by Jiangsu Sainty International Group will be used to pay back bank loans due soon and facilitate the rollovers of bank loans, a stock filing of Sainty Marine said on 12 June.
This measure will help stabilise the company’s financial situation if it is implemented.
As of 10 June, Sainty Marine and its subsidiaries have defaulted on a total of CNY558.3 million in bank loans and bills of exchange, according to a separate stock filing.
However, Sainty Marine plans to push ahead with the restructuring of Nantong Mingde Heavy Industry (NMHI), which it seeks to take over.
NMHI has entered into court receivership since Sainty Marine applied for the bankruptcy restructuring of NMHI in December 2014.
Sainty Marine has been in co-operation with NMHI to sell newbuilds by NMHI since 2013. As of end of 2014, Sainty Marine provided NMHI with a total of net CNY2.5 billion to finance newbuildings under construction at NMHI, making Sainty Marine the single largest creditor of the Nantong yard.
By the end of 2014, Sainty Marine found that NMHI was unable to repay the funds as the company had predicted.
Sainty Marine will also try to expand its channels of financings to resolve the loan defaults.