Cash boost for Rongsheng

China’s troubled Rongsheng Heavy Industries is to recover most of the CNY 630m ($102.6m) it paid as a deposit in the aborted takeover of an engine maker.

The yard announced that a mediation deal had been agreed by a Chinese court, settling all claims involving the Anhui Province Property Rights Exchange, which had retained the cash after the deal for Anhui Quanchai was scrapped in 2012.

Rongsheng will bank the money minus a settlement fee of CNY 86m and a sum of CNY 6.45m which is the subject of further negotiations.

The shipbuilder is paying all court fees, totaling CNY 1.6m.

TradeWinds reported last week that the local government of the city of Rugao has asked China State Shipbuilding Corp (CSSC)-controlled Shanghai Waigaoqiao Shipbuilding (SWS) to take over the yard’s beleaguered shipbuilding business.

In its six-month results statement, it said borrowings of CNY 262m were overdue and it had failed to comply with banking covenants on loans of CNY 609m.

It is seeking a waiver, however, and has obtained preliminary consent from the lender.

In June, it had been at risk of facing a demand for immediate repayment of loans worth another $1.4bn, but it said it had paid the overdue interest in July and the banks had taken no action.