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Shipbuilder Rongsheng changes name to focus on energy service provision

Shipbuilder Rongsheng changes name to focus on energy service provision
Financially troubled shipbuilder China Rongsheng Heavy Industries will change its name to reflect its shift in focus to become an energy service provider.

China Rongsheng announced on Wednesday the proposed change of name to China Huarong Energy Company Limited, as well as a proposed issue of warrants to raise up to HKD3.23bn ($416.49m).

“In order to strategically position itself as a more comprehensive energy service provider, the company has already completed the acquisition of 60% interest in the Kyrgyzstan Project in September 2014 and has been working to identify suitable investment opportunities in the energy resources exploitation sector,” China Rongsheng said.

The group believed that the change of company name would better “reflect the expansion of the group’s business scope and diversified operations”.

At the same time, Kingwin Victory Investment has agreed to subscribe to China Rongsheng’s warrants at HKD0.30 each for a total investment of HKD510m. The warrants will entitle the holders to 1.7bn new shares at HKD1.60 each to give China Rongsheng a net proceed of HKD3.23bn, or HKD1.20 within the first six months for a net proceed of HKD2.55bn.

Kingwin Victory is an investment company wholly-owned by Wang Ping. The completion of the transaction would see Wang own a 16.73% stake in China Rongsheng, making him the second largest investor behind the company’s former chairman Zhang Zhirong with 19.58%.

China Rongsheng said that if the warrants are exercised, funds will be raised for general working capital, which would allow the company to grow itself in the energy resources sector.