News Content

Credit Suisse, Chinese banks seize vessels of troubled Dongfang

Credit Suisse and a group of Chinese banks have seized seven of Dongfang Shipbuilding's tankers due to outstanding debts of around $250 million after the Singapore Supreme Court ruled in favour of the creditors, a minority shareholder said.
The Singapore-based shipbuilder was delisted from the alternative investment market of the London Stock Exchange last week after struggling for months to stay afloat in the face of a severe downturn in the maritime industry.
Dongfang has been without a chairman since Venkatesh Narayanaswamy resigned in February. Chief Financial Officer AKM Ismail quit a few weeks later.
Credit Suisse has taken control of four Dongfang tankers in Singapore since May 26 after the shipbuilder failed to pay around $42 million in debts, according to an industry official with knowledge of the matter and data posted on the website of the Supreme Court.
Three tankers have also been seized by a consortium of Chinese banks, including Agricultural Bank of China and Bank of China, due to outstanding debts of 1.3 billion yuan ($204.07 million), Narayanaswamy, who is also a minority shareholder in Dongfang, said on Monday.
Dongfang was previously contracted to deliver the seven vessels to European-based clients, which later cancelled the orders, Narayanaswamy said, without identifying the clients and the value of the contracts.
PKF International is the receiver-manager now, Narayanaswamy said.
Officials with PKF and Dongfang were not immediately available to comment.
Banks stopped lending to Dongfang more than a year ago, forcing the company to close down its shipyards in China and lay off hundreds of workers, according to Narayanaswamy and Ismail.
A sharp decline in ship financing, rock-bottom freight rates, an oversupply of ships and slowing economic growth have devastated the global shipbuilding industry.
As many as half of China's 1,600 shipbuilding companies are expected to go bankrupt or be acquired by larger rivals in the next two to three years, industry executives have said.
Only the biggest Chinese shipyards such as China Shipbuilding Industry Corp, China Rongsheng Heavy Industries and Yangzijiang Shipbuilding, may survive, they said.