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Sainty Marine aborts plan to help restructure Nantong Mingde

Sainty Marine aborts plan to help restructure Nantong Mingde
China’s troubled shipyard Sainty Marine has aborted its plan to help the restructuring of debt-ridden compatriot Nantong Mingde Heavy Industry.

The botched deal came as Mingde has repeatedly failed to submit its restructuring plan, and Sainty Marine itself did not have the ability to help Mingde.

Shenzhen-listed Sainty Marine, which is troubled by debts and lawsuits, confirmed on Thursday that it has decided to pull out from the planned debt-for-equity rescue deal for Mingde.

“The management of Mingde believed that in view of Sainty Marine’s cashflow problems, it is unable to channel any more resources to support the restructuring process,” Sainty Marine said in a statement to the stock exchange.

“In view of Mingde’s rather large-scale of operations and after a discussion with Mingde’s management, Sainty Marine has decided to stop its involvement in the restructuring of Mingde,” the statement said.

Back in December 2014, the local Chinese court had accepted Sainty Marine’s application to help restructure Mingde, and the latter would need to submit a restructuring plan within six months.

Sainty Marine has earlier warned that the debt-for-equity deal is expected to fall through as it faces a host of troubles – assets and accounts frozen by banks, contract cancellations, delays to newbuilding deliveries, lawsuits, and departure of senior officials.

Sainty Marine is Mingde’s biggest creditor and the two shipyards have been collaborating over newbuilding contracts so as to utilise yard capacity and lower costs.