Huarong Energy, formerly known as Rongsheng Heavy Industries, which was China’s largest privately owned shipbuilder, sold the assets to the bond holder for HK$1.
China Huarong Energy, which was rebranded from Rongsheng Heavy Industries in 2015, announced Monday it had completed the sale of its shipbuilding assets.
The company agreed in October to sell 98.5 percent interest equity of Rongsheng Heavy Industries and the entire interests in Rongsheng Engineering Machinery, Rongsheng Power Machinery and Rongsheng Marine Engineering Petroleum Services to the investment firm Unique Orient Ltd. for HK$1 (13 cents). The sale, which took place Sunday, also included 12.9 billion yuan ($1.9 billion) of the company’s debt, according to Lloyd’s List.
Unique Orient is owned by Wang Mingqing, who owns about HK$102 million ($13 million) of Huarong’s convertible bonds issued in November 2017. Huarong Energy said it had no prior business or other relationship with Unique Orient.
Huarong Energy’s Board of Directors viewed limited growth opportunities and an unlikely turnaround of the shipbuilding and engineering business. The company will instead focus on the energy business, including a plan to accelerate it and increase oil production volume.
Rongsheng was once the largest privately run Chinese shipbuilder, but stopped shipbuilding operations in 2014 after a financial crisis during market recessions.
