For the second half of 2016, CIMC Enric, subsidiary of China International Marine Containers (Group) Co (CIMC), made an additional RMB148m ($21.4m) of provisions, bringing the total provisions to RMB1.36bn for the financial year ended 31 December 2016.
The provisions were made due to the termination of the acquisition of 100% equity interest in SOE from Jiangsu Pacific Shipbuilding Group and Evergreen Group, and terminated the provision of financial assistance to SOE.
During the first half of last year, CIMC Enric had made provisions of approximately RMB1.21bn for the abandoned SOE deal.
As a result of the provisions, CIMC Enric is expecting a loss attributable to equity shareholders of the company of RMB905m to RMB952m in 2016, as against the profit of RMB519m in 2015.
If not for the provisions, CIMC Enric said it would have made a profit attributable to equity shareholders of the company of at least RMB410m in 2016.
“The board considered that the terminations will have no impact on the normal business operation of the group and that the financial position of the group remains sound,” CIMC Enric stated.
The acquisition of SOE by CIMC Enric fell through after the entire equity interests of SOE were seized by the Chinese courts due to unpaid debts. SOE had been liquidated following a decision made by Jiangsu Qidong People’s Court in August last year.
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