China Ocean Industry Group has agreed with a company listed on SGX and Wuxi Tianshi Education Goods to establish a shipbuilding joint venture in Ruichang city, China.
The framework agreement between China Ocean Industry, its subsidiary Jiangxi Shipbuilding, and the two remaining parties was inked on July 10, 2018.
Under the terms of the agreement, the shipbuilding JV will have registered capital of RMB 100 million (USD 15 million). A Singapore-listed company, understood to be Yangzijiang Shipbuilding, will own 60% of the JV by investing RMB 60 million, China Ocean Industry 40% and Wuxi Tianshi 10%.
The framework agreement follows the cooperation deal signed between China Ocean Industry, the Singapore-listed shipbuilder and the Ruichang government for the management of Jiangxi Shipbuilding, which has been experiencing financial difficulties in recent years due to the lack of new orders.
The shipbuilding JV is expected to achieve an annual capacity of four to six vessels of 20,000 tons within two to three years, China Ocean Industry said.
What is more, the Singapore-listed company is to establish and manage a vessel export firm. The company will also assist Jiangxi Shipbuilding to complete the construction of four vessels. Proceeds from the sale of the ship quartet will be used to repay loans, according to China Ocean Industry.