BEIJING Feb 18 CSC Nanjing Tanker Corp
is poised to become the first company backed by
China's central government to delist from a domestic stock
market after it breaches exchange rules and reports its fourth
consecutive year of losses.
The expected delisting of Nanjing Tanker, the oil and bulk
chemicals marine freight subsidiary of state-owned Sinotrans &
CSC Holdings Co Ltd, is a rare event that
underscores the difficulties facing Chinese companies facing
record high debt and slowing economic growth.
These problems are worse for sectors struggling with
overcapacity. China's State Council has said the government
would block new approvals in five industries affected by chronic
oversupply, including shipbuilding.
"We'll be delisted according to securities markets rules if
the audited annual results show a loss," Ding Wenjin, a Nanjing
Tanker board member, told Reuters. The company, listed on the
Shanghai stock exchange, is due to report 2013 earnings in
Nanjing Tanker said last month it expected to report a net
loss of 1.27 billion yuan ($209.34 million) for 2013, after the
Jiangsu-based company said net losses reached 1.24 billion yuan
a year earlier. It shares have not traded since May.
Nanjing Tanker reported 12.45 billion yuan ($2.05 billion)
in total debt at the end of September, with debt outpacing
equity more than four times, according to exchange filings.
Analysts said most government-controlled enterprises were
willing to help their subsidiaries stay afloat, but cautioned
that most of these units were in better financial shape than
In the past month, state-backed firms Angang Steel
and China Cosco Holdings
have said they expect to see a profit in 2013 for the
first time in three years, largely due to one-time cash
injections from asset sales.
"The big state-owned enterprises can take measures to turn
red into black, and the government also will try to help them"
said Cao Xuefeng, head of research at Huaxia Securities Co. in
Chengdu. "There's a lot of room."
Nanjing's parent firm Sinotrans & CSC Holdings is one of the
key state-owned enterprises operating under the direct
administration of the State Council's State-owned Assets
Supervision and Administration Commission.
It reported group turnover of 106.7 billion yuan ($17.60
billion) and assets of 122.9 billion yuan in 2012. The group
holds five listed companies, including Sinotrans Ltd,
a shipping, warehouse, and railways company as well as Sinotrans
Another subsidiary, Changjiang Shipping Group Phoenix Co
, has also reported three consecutive years of losses
but may be spared delisting as it is holding bankruptcy
restructuring talks with creditors, Sinotrans spokesman Xu
Jiandong told Reuters.
The dry bulk goods shipper has been sued for loan repayment
by five banks, including China Merchants Bank Co.
and China Minsheng Banking Corp. It also faces
lawsuits by the leasing arm of the Industrial and Commercial
Bank of China and China Petroleum and Chemical Corp
for unpaid bills.
($1 = 6.0641 Chinese yuan)
(Additional reporting by Clement Tan in Hong Kong; Editing by