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Financially troubled Shandong Huahai Shipbuilding enters restructuring

Financially troubled Shandong Huahai Shipbuilding enters restructuring
China’s Shandong Huahai Shipbuilding has started a restructuring process in an attempt to clear its debts, and a first creditors’ meeting is scheduled on 29 October, reports said.

Shandong Jintuo Energy Co, the main creditor of Huahai, applied to Rizhao City Intermediate People’s Court to restructure the privately-owned shipyard on 30 August.

Since last year, Huahai has already faced financial difficulties amid the recession of the global shipbuilding industry.

In October 2014, Qingdao Maritime Court decided to auction a 36,000-dwt multi-purpose cargo vessel under construction at Huahai for its buyer Yantai Pacific Offshore. The court ruled that Huahai had failed to pay its guarantee for the vessel and its financial obligations to Yantai within an agreed timeframe.

Huahai opened for business in 2007, the time when shipbuilding was at its peak. But the market boom was shortlived as the global financial crisis hit in the last quarter of 2008.