It is confirmed in recent that the major private shipbuilder China Ronsgsheng Heavy Industries Group will be acquired and reconstructed by China CSSC Holdings Limited.

Over the weekend, Rongsheng made a further announcement that it had been "notified by a government authority that they are procuring an independent third party to consider and, if appropriate, to initiate a potential restructuring involving Jiangsu Rongsheng Heavy Industries

Rongsheng added, the company does not currently possess any confirmed details on the potential restructuring, which might involve a restructuring of assets, business, debt and/or equity and might involve a dilution of its equity interest attributable to the group (which might or might not also affect whether Jiangsu Rongsheng Heavy Industries continues to be a subsidiary of the group)."

As to the reason why the local government intervenes and makes Waigaoqiao lead Rongsheng’s reconstructing, a crew from Rugao city government told reporters, “the main reason is we have heard Waigaoqiao Shipbuilding may have a plan to expand production or relocate, and Jiangsu Rongsheng is undoubtedly the best choice for it”.

According to published statistics, Waigaoqiao covers a total area of 5 million square meters, of which the annual shipbuilding capacity is over 7 million deadweight tonnage and has become the No. 1 Shipyard in China, of which both the annual shipbuilding capacity and economic benefit have continuously reached the top place among the domestic shipbuilding enterprises.

On the contrary, Rongsheng has drifted further into trouble widening its first half loss significantly to RMB3.06bn ($498.1m) from RMB1.29bn previously raising going concern issues for the company.

However, just 5 days ago, Rongsheng was listed among 51 shipbuilding facilities deemed worthy of policy support.