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Rongsheng predicts half-year losses

By ZHONG NAN | | Updated: 2013-07-05 16:04

Rongsheng Heavy Industries Group Holdings Ltd, China's largest private shipyard, said on Friday it predicted net losses in the first half of this year amid media reports that suppliers and subcontractors were taking matters into their own hands.

Trading of its shares was suspended in Hong Kong on Thursday after the Wall Street Journal reported that the company cut 8,000 jobs in recent months. Trading resumed on Friday.

Some media reports said that suppliers removed equipment from its Nantong production base to use for collateral security, and subcontractors absconded without paying wages.

Rongsheng said sluggish demand had caused a fall in prices as banks and financial institutions tightened credit facilities.

Payments to the Chinese shipyard had also been disrupted, it said.

These factors had hit cash flow, the company said on Friday in filings to the Hong Kong Stock Exchange.

The company confirmed that some contract workers had surrounded the entrance of its factory in Jiangsu province earlier this week, but the crowd later dispersed on management assurances.

The company's main shareholder Zhang Zhirong agreed on Wednesday to grant an interest-free and unsecured loan of 200 million yuan ($32.6 million) for operational capital.

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