China's state-owned shipbuilder Zhoushan Wuzhou Ship Repairing & Building Co. Ltd (ZWSRB) is first government-backed shipbuilder to go under since sector started having problems last year.
Zhoushan Intermediate People's Court said it accepted a petition filed by Zhejiang Shipping Group regarding the bankruptcy of a subsidiary called ZWSRB, reports Caixin.
The court said it had frozen the assets of Wuzhou Ship Repairing & Building, which was founded in 2001. The shipbuilder had debts of 911 million yuan and total assets of 534 million yuan as of September 30 this year, its financial report showed.
Wuzhou Ship Repairing & Building started having financial difficulties last year, a person with knowledge of the matter said. Its parent gave it huge amounts of money only to see the situation worsen this year, the source said.
Wuzhou Ship Repairing & Building is the first state-owned firm to go bankrupt since the shipbuilding industry started slowing last year. A privately owned company, Mingde Heavy Industry Group, went under on July 31.
Other state-owned shipbuilders have indicated they are in trouble. Sainty Marine Corp. Ltd. and Wuhu Shipyard Co. Ltd. have both said in December they are on the verge of bankruptcy.
Rongsheng Heavy Industries Group, once the country's largest shipbuilder, stopped production, the private company said in March. Other private firms in the industry that are in trouble include Jiangsu Eastern Heavy Industries Co. Ltd., Zhejiang Judger Shipbuilding Co. Ltd. and Zhejiang Zhenghe Shipbuilding Co. Ltd.