Rongsheng Heavy Industries announced in a stock filing today their plan to issue HK$1,400,000,000 (USD $180 million) in convertible bonds in an effort to help subsidize the growth of their offshore engineering business.
China’s largest privately-held shipbuilder has been seen by many as a symbol of the decline of the shipbuilding industry over the past few years, one that has hit Rongsheng particularly hard.
The bonds are to be issued at an initial conversion price of HK$1.00 per share which represents a premium of approximately 21.95% over the last closing price of HK$0.82 per share as quoted today on the Hong Kong Stock Exchange.
Rongsheng estimates net proceeds from the issuance of these bonds to be approximately HK$1,379,000,000.
Earlier this month, Rongsheng appealed to the Chinese government and their biggest shareholders for financial help after laying off a huge swath of its workforce, delaying payments to suppliers, and warning of a net loss for the first half of 2013.