Itic woes no bar to yard's growth
Guangzhou Shipyard International chairman Hu Guoliang believes the company's operations will grow this year but uncertainty remains over whether it will make a loss due to problems recovering trust deposits.
The H share has outstanding trust deposits of about 521 million yuan (HK$485.05 million) with three cash-strapped international trust and investment companies, including Guangzhou International Trust and Investment Corp (Gzitic).
Mr Hu said it would become clearer in the second half how much the firm could recover.
The firm is suing Guangzhou Economic and Technology Development Zone International Trust and Investment and Guangzhou Foreign Economic and Trade International Trust and Investment to claim a combined 65 million yuan of deposits.
Hearings were expected to be held during the first half.
He said Guangzhou Shipyard had decided not to take legal action against Gzitic as it wanted to wait until a preliminary restructuring proposal was put forward. This is expected by August.
He said the company had not taken any assets from Gzitic as collateral for the deposits of 456 million yuan because of questions over value and ownership.
The H share made 19.03 million yuan in net profit last year, down 52 per cent over the previous year.
Mr Hu said the company's operations and financial position were not affected by the trust deposit problem.
However, financial expenses were expected to increase this year because of the large amounts of capital tied up with the trust companies.