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Zhenghe Shipbuilding files for restructuring

Zhenghe Shipbuilding files for restructuring
Privately-owned Zhejiang Zhenghe Shipbuilding has applied to a local court to restructure its business in the face of financial difficulties, the company announced.

The Zhoushan-based shipbuilder, despite being on the list of China’s ‘white list’ shipyards, has failed to tide through the current downturn of the shipbuilding industry, where thousands of Chinese yards have shutdown since the post-2008 global financial crisis.

The application for a restructuring was made at Dinghai Zhoushan Intermediate People’s Court in March this year, Zhenghe Shipbuilding said, adding that it will soon to start the restructuring process.

Amid the gloomy situation, Zhenghe said that the yard is currently gradually resuming its production and maintaining its workforce.

In the next three to five months, a complete restructuring plan will be in place, mainly aimed at reviving the yard production and reducing debts.

Zhenghe Shipbuilding, a specialist builder of dry bulk carriers, gained the ‘white list’ yard status back in September 2014, when the Chinese government announced the first batch of 51 listed yards. Since then, there are currently 60 ‘white list’ shipyards, poised to benefit from prioritised financial support from the local banks.

Zhenghe Shipbuilding is not the only ‘white list’ yard to face financial problems. Some other ‘white list’ yards such as Jiangsu Rongsheng Heavy Industry, Sainty Marine and Nantong Mingde Heavy Industry are all facing financial troubles.