Troubled Rongsheng talks funds with Citic
Mainland's No 1 private shipbuilder planning issue of shares to one or a group of investors to raise US$200 million to strengthen capital
Rongsheng Heavy Industries, whose founding and controlling shareholder was caught up in an insider trading scandal last year, has entered closed-door talks with the capital-rich state-owned China Citic Group for new investment in the mainland's No 1 private shipbuilder.
People familiar with the matter told the South China Morning Post that Zhang Zhirong, whose family tightly controls Hong Kong-listed Rongsheng, planned to issue new shares in a private placement to one or a group of new investors to raise US$200 million to strengthen the company's financial position.
Zhang has reached out to Chang Zhenming, the chairman of Beijing-based Citic for negotiations on relevant fundraising matters, said the people who declined to be identified as the talks remained private and confidential.
Zhang could not be reached for comment. Citic was not available for comment.
If successful, the deal would be one of the biggest, and apparently the most high-profile, private placement transactions in Hong Kong so far this year.
Besides Rongsheng's talks with Citic, directly led by the State Council, Zhang also held talks with several major global private equity firms including American investment firm KKR, said the people.