The two Chinese shipbuilding enterprises have applied to Wenzhou Intermediate Court in April to restructure its debts, spanning across 49 creditors demanding RMB1.2bn ($193.4m).
The 1996-established Judger Group, a large scale enterprise with businesses in clothing, properties, mining, ventured into the shipbuilding business in 2006. The group had believed that shipbuilding was a highly profitable business that can match or even surpass its clothing business.
In 2007, its shipbuilding construction officially started. But shortly after in late 2008, the global financial crisis hit, sending the shipbuilding industry into a severe recession. With the shipyard operations up and running, the group continued to build up the business and invested RMB1bn into this new venture by 2010.
When the shipbuilding industry displayed some signs of growth in 2010, Judger’s yards took in more new orders, but the burden of the highly capital intensive operation and lack of cashflow eventually brought its shipbuilding business to its knees.
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