Hong Kong-listed China Rongsheng Heavy Industries has entered into a memorandum of understanding with an undisclosed third party, also from China, to sell its onshore shipbuilding and offshore engineering business.
The decision has been triggered by a depressed shipbuilding market that has incurred considerable losses for the group’s shipbuilding operations further affecting its energy service business.
“The Potential Transaction shall adjust and optimize the assets and business of the Group, and divest the relevant assets and liabilities of the shipbuilding business and offshore engineering business, which shall help to ease the debt burden of the Group, enhance the flexibility of fund utilization, better implement the strategy of business transformation and transformation into an energy service provider focusing in the oil and natural gas market ,” the company said in a statement.
The transaction is subject to the signing of a formal transaction agreement, the final terms and conditions of which are still under further negotiations by both parties.
The MOU is scheduled to remain in effect until 30 June 2015.