China to prop up machine tool company with US$1.4 billion lifeline
SHANGHAI - Shenyang Machine Tool, based in Liaoning province’s namesake provincial capital, will receive a major support package from China Construction Bank and the Shenyang branch of the State-Owned Assets Supervision and Administrative Commission (SASAC), the agency that oversees big State-run companies and is one of Shenyang Machine Tool’s major stakeholders.
Caixin reports the package includes RMB10 billion (US$1.45 billion) to reduce the company’s debt and reorganise its business, according to a filing to the Shenzhen Stock Exchange.
Shenyang Machine Tool has fallen victim to a broader slowdown in the machine tool sector, which supplies equipment to industries engaged in production of cars, airplanes, boats and electronics.
According to its latest annual report, Shenyang Machine Tool’s net loss more than doubled last year to RMB1.4 billion, as revenue fell by 2% to RM 6.2 billion.
One of its peers, Dalian Machine Tool Group Corp., made headlines earlier this year when it announced it had defaulted on some of its short-term bills. www.webershandwick.cn (ATI).