Sainty Marine warns of bigger loss this year after a $52m deficit in 2014

Shengzhen-listed Sainty Marine announced a net loss of RMB327.59m ($52.15m) in the year ended 31 December 2014, as against a profit of RMB123.55m in 2013.

Revenue dropped 7.2% year-on-year to RMB3.03bn due mainly to the weak shipping market where newbuildings prices and upfront payment by owners have remained low.

Late last year, Sainty Marine entered into a takeover deal of Mingde, its biggest creditor, via a debt-to-equity rescue plan.

If the restructuring process of Mingde is successful, Sainty Marine will still be hit by a loss of approximately RMB5.32m in 2015 after taking on Mingde’s debts.

In the event that the restructuring of Mingde is unsuccessful, Sainty Marine will be hit by a much bigger deficit of RMB2.95bn as Mingde enters bankruptcy and refunds have to be made for all the cancelled newbuilding projects.

Cash-tight Mingde had been collaborating with Sainty Marine to jointly win newbuilding orders, eventually leaving the former in the debt of the latter over the years.