Dalian Shipbuilding Industry Offshore, a subsidiary of Dalian Shipbuilding Industry Co (DSIC), has entered court-ordered restructuring due to debt issues.
According to an exchange filing from China Shipbuilding Industry Co, which wholly owns DSIC, Dalian Intermediate People’s Court has appointed King & Capital Dalian Law Firm as the administrator of the yard’s restructuring.
The court ordered Dalian Shipbuilding Industry Offshore’s restructuring as the company was unable to pay service fees totalling CNY 7.95m ($1.19m) to Dalian Shenghua Ship Engineering. As of 31 December, it had a negative net asset value of CNY 1.92bn.
Dalian Shipbuilding Industry Offshore was established by DSIC and an investment arm owned by Wang Lishan, an executive director of Jutal Offshore Oil Services, earlier this century to harness newbuilding demand for offshore units such as drilling units.
While DSIC has contracted some of its orders to the unit, the business of Dalian Shipbuilding Industry Offshore has never really taken off, however.
Clarksons data shows the yard has only two VLECs on its orderbook, both of them for Jacques de Chateauvieux's Jaccar Holdings. The first of them was delivered earlier this month, while the second, due next year, is not expected to be affected as DSIC will likely step in.
China Shipbuilding Industry Co, the Shanghai-listed flagship unit of state giant China Shipbuilding Industry Corp, said in the filing: “The restructuring will not have a significant impact on our operation, as navy building remains our main business.”
The company is preparing to book provisions, having been owed CNY 95m by the offshore subsidiary, according to filing. Its net results on a consolidated basis are expected to be boosted by CNY 980m in 2019, however, as the bottom lines of Dalian Shipbuilding Industry Offshore won’t need to be taken into account.
