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Rongsheng in funds talks with Citic: report

Rongsheng in funds talks with Citic: report
Hong Kong: China's top private yard Rongsheng Heavy Industries has entered closed-door talks with state-owned China Citic Group for new investment, according to local media reports.

Sources were quoted as saying that Zhang Zhirong, former chairman and biggest shareholder of China Rongsheng, planned to issue new
shares in a private placement to one or a group of new investors to raise $200m to strengthen the company's financial position.

Rongsheng's talks with Citic were directly led by the State Council, the report said. Zhang was also reportedly in talks with several major
global private equity firms including KKR but the discussions did not go further partly because the American investment firm was concerned
about the heavy level of debt raised by Rongsheng over the past few years to support its business expansion.

The deal with Citic would come from a different perspective given its state-owned background, keeping the major yard in Chinese hands from a strategic national security perspective.

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