China Rongsheng Heavy Industries inks CNY30bn deal with China Development Bank

The deal to step up the company’s development of high-end offshore engineering equipment manufacturing operations.

China Rongsheng Heavy Industries Group Holdings Limited (“China Rongsheng Heavy Industries”), a large heavy industries group in China, signed a strategic collaboration agreement with China Development Bank (“CDB”) at Nanjing on 26 August. According to the agreement, the Group is to initiate RMB 30 billion worth of strategic cooperation with CDB.

Mr. Chen Qiang, Chief Executive Officer and Executive Director, said, “The rapid development of China Rongsheng Heavy Industries requires long-term support from CDB and other financial institutions. The execution of this strategic collaboration agreement demonstrates our good relationship with CDB. The two industry leaders join forces together at a time when the banking sector is tightening monetary policy and standardising financing activities in China, the partnership reflect strong confidence of the banking community in our prospects. It also consolidates our presence in the offshore engineering industry.”

Since the collaboration with CDB began in 2008, China Rongsheng Heavy Industries has further strengthened the relationship with the financial institution. The Group obtained strong support from CDB in particular for the construction of its offshore engineering production base. This strategic cooperation of RMB 30 billion will mainly contribute to the development of high-end offshore engineering equipment manufacturing business of the Group. CDB is to provide a range of financial services including financing planning, financial consultancy, integrated credit facility, and project development. These services would enhance the development of core business including shipbuilding and offshore engineering, and two other main business segments including marine engine building and engineering machinery at the same time.

Mr. Wang Quan, Deputy Secretary General of Jiangsu Provincial Government and Director of the Provincial Finance Office, Mr. Qin Yan, Director of National Defence Industry Office of Jiangsu Provincial Government, Ms. Chen Huijuan, Deputy Mayor of Nantong and Secretary of CPC Rugao Municipal Committee, Mr. Mao Juncai, President of CDB Jiangsu Branch, and Mr. Chen Qiang, Chief Executive Officer of China Rongsheng Heavy Industries all attended the signing ceremony.

CDB has previously granted project loans and credit to the Group, supporting the Group’s development of high-end offshore engineering equipment manufacturing. For example, in December 2009, it served as the lead arranger for a RMB 2.15 billion syndicated loan to the Group for an offshore engineering project. With the increasing demand for deep ocean oil and gas to satisfy China’s expanding energy needs, offshore engineering has been positioned as a key emerging industry supported by the country.

The Group is enhancing its R&D in high-end offshore engineering equipment. As one of the major banks supporting emerging industries, CDB has been actively assisting the implementation of large projects in the offshore engineering industry. The signing of the strategic collaboration agreement between China Rongsheng Heavy Industries and CDB in the initial year of the Twelfth Five-Year Plan period is of profound importance in creating a new scope of cooperation for both parties.

Mr. Chen Qiang concluded, “Since August 2010, China Rongsheng Heavy Industries has signed strategic cooperative agreements with financial institutions including the Export-Import Bank of China, Bank of China, Agricultural Bank of China, China Everbright Bank, China CITIC Bank and CDB and secured a huge amount of credit limit. The strong support from both domestic and overseas banks has added strategic significance for the Group’s corporate development and amply demonstrates their confidence in the Group.”