Chinese shipbuilder JES International Holdings said today that it has agreed to sell its shipbuilding business to Hong Kong Victo International Limited.
The sale relates to the entire registered capital in Jiangsu Eastern Heavy Industry (JEHI) and Jiangsu New Eastern Marine Engineering Equipment (JNEME) and 49% of the registered capital of Jiangsu Nereus Shipyard (JNS).
The proposed sale amounts to USD 500,000, JES said.
JES resorted to the sale following discussions with potential investors to either invest in or bring business into the company to resolve insolvency issues and pending restructuring.
The group faces commercial uncertainty as the known bank debts of the now to be sold companies greatly exceed the value of their fixed assets.
In addition, the uncertainty is further fulled by delays in the proposed restructuring process.
Namely, JEHI had filed an application in the People’s Republic of China for a proposed restructuring scheme between JEHI and certain of its creditors, which is still pending an appeal to the Jiangsu High People’s Court on the decision by the Taizhou Intermediate People’s Court to reject the application.
“The insolvency of the disposal companies and the continuous delay in the proposed restructuring means that management has had problems in engaging investors to commit to any form of investment. Almost all interested investors have indicated that they will only either invest in or bring business into the company if the disposal companies are no longer part of the company,” JES said in a release.
The group had originally expected the restructuring scheme to be completed by the end of 2015 or early in 2016. However, the original application has yet to be approved.