Sainty Marine Plans to Swap Some Debt With New Shares in Revamp

Sainty Marine Corp., a shipbuilder based in the eastern Chinese city of Nanjing, plans to convert its capital into about 520 million new shares and swap some or all of them with debt as part of a revamp.

Creditors will get one equity share for about 13.72 yuan ($2.1) of Sainty’s debt under the restructuring, the company said in a draft plan to the Shenzhen stock exchange.

Sainty Marine had more than 800 million yuan ($120 million) of loans overdue when trading in its shares was halted about a year ago. Sainty resumed trading in July, rallying 23 percent in four weeks after it disclosed a plan to buy assets by issuing stock to its controlling shareholder. The company remains at risk of bankruptcy, Sainty said in several August filings, and the transactions need government approval.

About 171 creditors have claimed 8.85 billion yuan of debt as of Sept. 6 and Sainty has total equity of 374.9 million shares as of Aug. 15, according to the filing to the stock exchange.

A slump in oil prices over the last two years has caused energy projects to be delayed, shrinking demand for ships and prompting many liners and builders to cut jobs and seek restructuring.

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