Sainty Marine in Troubles Waters
Financially troubled Chinese shipbuilder Sainty Marine has announced Bank of China and China Exim Bank have frozen its bank accounts.
Shenzhen-listed Sainty Marine has also announced that it has reached an agreement with Dutch ship investment firm, Universal Marine, for the cancellation of four 2,350teu containerships.
Universal Marine ordered the vessels at Sainty Marine in March 2014, however, it has been unable to secure the financing to start the newbuilding project, which has led to the cancellation of the vessels. No compensation is involved in the agreement.
The struggling shipbuilder said that it had not received a court notice from the banks on their decision. The move comes following last week’s court order on freezing of the company’s assets worth RMB 300 million.
Precious Shipping has refused to take delivery of two 64,000dwt bulkers from the yard, which might lead to the two companies to go into arbitration.
Precious Shipping ordered the two vessels at Sainty Marine in April 2014, and Sainty Marine sent notices to Precious Shipping in March 2015, asking it to take deliveries of the vessels on April 17 and April 24. However, Precious Shipping has refused to take deliveries as it reckons the vessels didn’t meet quality standards.
Sainty Marine reported defaults on USD 9.2 million bank loans. The loans were borrowed from Bank of Nanjing and China Merchants Bank on a six-month term respectively. Sainty Marine did not disclose uses of the short-term loans.
Recently, the Nanjing Intermediate People’s Court has issued an order to freeze some RMB300m worth of assets owned by three major shareholders of Sainty Marine, two of whom have quit.
The company said the defaults were a result of tight liquidity. Sainty Marine is facing the risk of a delisting from the stock-exchange.
However, Sainty Marine's chairman dismissed suggestions that the shipbuilder will go broke on a series of defaults.
The company is actively dealing with the defaulted bank loans, Wang Shuhua, chairman of Sainty Marine stated adding that as long as the measures used to tackle the defaults are effective, the company will not be bankrupt.
