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Huarong Energy wants more time to execute debt relief deal

Huarong Energy wants more time to execute debt relief deal
Debt-ridden China Huarong Energy Company has said it needed more time to materialise a plan to dispose of its liabilities so as to pay back RMB17.11bn ($2.56bn) in borrowings and payables due from the group.

The shipbuilder-turned-energy service provider announced a couple of weeks ago that the disposal of liabilities plan involved the allotment and issue of subscription shares to certain bank and supplier creditors.

“Accordingly, additional time is required to implement the disposal of liabilities, including the allotment of shares. As at the date of this announcement (14 September), the company and the creditors have not yet entered into any definitive agreement in respect of the disposal of liabilities,” Hong Kong-listed Huarong Energy said.

The group mentioned earlier that the disposal of liabilities would enable it to ease debt burdens and improve the operationf of shipbuilding business, as well as mitigate the adverse effect of the high gearing of the group on its expansion in the energy service industry.

Huarong Energy, formerly known as Rongsheng Heavy Industries, had changed its name to reflect its shift in focus to become an energy service provider.