Privately-owned shipbuilder issued a statement on Friday saying “there has not been any incident of abscondment of salary payment by any subcontractor of the group nor any incident whereby suppliers of the group have towed away machineries from the group's production base in Nantong in response to the group's failure to settle payments.”
Earlier this week, hundreds of workers had reportedly protested and formed a blockade outside the headquarters of the group's Nantong production base, leading to Rongsheng ordering a work stoppage from 2-8 July.
Share tradings of Rongsheng on the Hong Kong Stock Exchange were also halted on Thursday before it resumed on Friday.
While Rongsheng admitted that there has been delay in payment to its suppliers and workers due to the group's working capital under pressure in recent months, it is not the intention of the group to default on the payments.
In recent months, tight cashflow problems have led to the shipbuilder laying off around 8,000 workers amid the global slump in the shipbuilding sector.
Rongsheng confirmed that the workers involved in the strike were dispersed after the management explained the policies of the group to them.
Meanwhile Rongsheng warned investors of a net loss for the six months ended 30 June 2013. The expected loss is due to the continuing decline of the shipbuilding market, orders and prices of vessels decreased sharply as compared with the previous year.
Rongsheng said it is currently in discussions with a number of banks and financial institutions to renew its existing credit facilities, and seeking financial support from the government and the substantial shareholders of the company.
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