Embattled shipbuilder China Rongsheng Heavy Industries reported 3.8 billion yuan (HK$4.7 billion) in negative revenue for last year, and a precarious balance sheet with 18.2 billion yuan in borrowings immediately payable. Rongsheng said the negative top-line was due to a reversal of revenue of some 4.5 billion yuan arising from cancelled contracts. “According to the agreements and cancellation notice, the group had to refund to these customers the instalments received from them and to pay interest on these instalments at the interest rate in accordance with the contracts,” the company said in a statement to the Hong Kong stock exchange on Tuesday. Net losses amounted to 7.8 billion yuan. This is not the first time Rongsheng, once China’s largest privately owned shipyard, has reported negative revenues. In 2013, Rongsheng reported 1.34 billion yuan in full-year revenue, falling short of the 1.58 billion yuan in revenue reported for the first half. Its gearing ratio as of December stood at 98.6 per cent, with 697.5 million yuan of bank borrowings in default. The overdue repayments triggered cross-default terms in certain financial covenants and resulted in 18.2 billion yuan in borrowings being immediately payable, Rongsheng said.