Huarong Energy exits shipbuilding with Rongsheng sale

The sale of the shipbuilding and engineering businesses through the share transfer of its wholly-owned subsidiary Able Diligent Limited which owns Rongsheng's businesses..

Able Diligent Limited holds 98.5% equity interest of Rongsheng Heavy Industries Holdings Limited, the entire equity interest in Rongsheng Engineering Machinery Limited; the entire equity interest in Rongsheng Power Machinery Limited; and the entire equity interest in Rongsheng Marine Engineering Petroleum Services Limited. 

Huarong Energy initially entered into agreement with Unique Orient Limited last year to sell all the shares in Able Diligent Limited.

Huarong Energy had been facing a difficult financial situation in recent years. The board of the company had agreed that there are limited growth opportunities and future profitability of the shipbuilding and engineering business, it is in the best interest of the company to dispose of the shipbuilding and engineering Business.

Rongsheng Heavy Industries was one of the largest shipbuilders in China but was hit hard by the collapse in the ship newbuilding market after the global financial crisis, and an attempt to break into the offshore marine space failed due to the sharp drop in the oil price,

Upon completion of the deal, Huarong Energy will be engaged in the energy exploration and production businesses.