China’s heavily indebted shipbuilder China Rongsheng Heavy Industries has cancelled a warrant issue after the reported arrest of a key investor.
Namely, Mr. Wang Ping , who wholly owns and controls the subscriber, has been detained by the Beijing police for investigation on matters which, the company said, are not related to the group or the warrant issue.
Rongsheng said that it had no information as to the details of the incident and has been unable to contact Mr. Wang Ping.
As a result, the ability of the subscriber to perform its obligations regarding the warrant issue prior to March 31st, 2015 is in question, the company added.
“ In light of the current circumstances, the Board has decided that it is not in the best interests of the company and its shareholders to proceed with the warrant issue. The company will seek legal advice on the arrangement regarding proposed resolution no. 1 as set out in the Notice of EGM to approve the Subscription Agreement, the warrant issue and the specific mandate to allot and issue the Subscription Shares, ” the shipbuilder said in a statement.
The warrant issue would have provided China Rongsheng with much needed HK $ 510 million cash injection.
The warrants were intended to be issued to Mr.Wang’s Kingwin Victory Investment Ltd, a Cayman Islands-private equity firm as agreed in October last year.
The deal would have allowed entitled subscribers to buy up to 1.7 billion new shares at HK$1.60 each.
Wang Ping was arrested on Feb. 23 by Beijing police over financial irregularities in another company he chaired, the Cypress Capital Group.
World Maritime News Staff