China’s Judger Shipbuilding has filed for bankruptcy at a local court after it failed to overcome its weak financial position since 2012.

Wenzhou Intermediate People’s Court received the bankruptcy filing from the shipbuilder last Thursday, and a creditors’ meeting will be held on 27 May.

Established in 1996 by Zhejiang Judger Group, the Wenzhou-based shipyard currently has debts of around RMB1.73bn ($278.78m).

In 2010 when the shipbuilding industry made a slight recovery, the shipbuilder managed to win 10 newbuilding orders, including dry bulk carriers and chemical tankers. It also won an order to build two 82,000 dwt worth up to RMB600m for Hong Kong-based Parakou Shipping, but the owner abandoned the order.

In its further attempts to walk out of its financial difficulties, the Judger Shipbuilding managed to resell the two 82,000 dwt bulkers in 2013 and 2014.

But mounting debts have led the company to believe that bankruptcy is the only option.

China’s shipbuilding sector is undergoing a consolidation phase amid the industry recession, and observers noted that more yards would be forced out of business due to a lack of orders and cashflow.