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Sainty Marine ordered to pay $10m to local bank

Sainty Marine ordered to pay $10m to local bank
Debt-ridden Sainty Marine has been ordered by a local court to pay RMB63.67m ($10m) in overdue bill of exchange plus other costs to Jiangsu Zhangjiagang Rural Commercial Bank.

Sainty Marine said in a regulatory filing that the Chinese bank filed the lawsuit against the company on 29 June, seeking payment of RMB63.48m under the bill of exchange plus interest up until 27 June, and RMB184,605 in management fees.

“The company will appeal to the court within the approved timeframe and closely monitor the litigation process,” Shenzhen-listed Sainty Marine said.

The bill of exchange was drawn from the bank on 3 November 2014 for Nantong Mingde Heavy Industry to borrow RMB50m. On 20 March 2015, a second bill of exchange for RMB19.9m was issued, with Sainty Marine as the guarantor for both bills.

Mingde Heavy, however, has declared bankrupted and Sainty Marine defaulted on the payments which were due on 28 April this year.

Sainty Marine, which is the biggest creditor of Mingde Heavy, had wanted to help restructure the latter via a debt-for-equity deal. But Sainty Marine is itself troubled by a host of problems, forcing it to abandon the restructuring rescue of Mingde Heavy.

The two Chinese shipyards had a longstanding collaboration in taking on newbuilding contracts in a bid to lower costs and better utilise facilities amid the shipbuilding downturn.