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Sainty Marine to apply debt-to-equity rescue deal for bankrupt Nantong Mingde

Sainty Marine to apply debt-to-equity rescue deal for bankrupt Nantong Mingde
Debt-ridden Nantong Mingde Heavy Industry will enter into a restructuring process as ordered by a local court and the shipbuilder is expected to be acquired by compatriot shipbuilder Sainty Marine.

Nantong Intermediate People's Court on 26 December ordered Mingde to file for bankruptcy and its biggest debtor Sainty Marine will take control of Mingde via a debt-to-equity rescue deal.
Due to the prolonged recession of the global shipbuilding industry, particularly in China, Mingde has been making losses and failed to secure fresh loans from the banks, local reports said. Mingde, lacking cashflow, had been collaborating with Sainty Marine to jointly win newbuilding orders, eventually leaving the former in the debt of the latter over the years.
Mingde is one of China's 59 'white list' shipyards, which are expected to enjoy financial support from the local banks and gain recognition as reputable shipbuilders. Sainty Marine also made it to the 'white list'.
Sainty Marine recently announced to the stock exchange that it has cancelled four newbuildings with Corbita Maritime Investment as the shipowner could not make payments. The botched deal is expected to result in a potential loss of RMB37m ($5.9m) in 2014 for the Shenzhen-listed yard.
At present, Mingde continues its daily operations as the yard holds an order for 14 stainless steel chemical tankers due for deliveries between 2016 to 2017.