China Rongsheng Heavy Industries Group Holdings Ltd halted share trading yesterday after media reports said China's largest private shipbuilder had laid off 8,000 workers amid a downturn in the industry.
The Wall Street Journal said these workers represented about 40 percent of Rongsheng's workforce, citing Lei Dong, secretary to the president. Rongsheng declined comment yesterday after suspending share trading pending clarification of the news.
Rongsheng shares tumbled 10 percent in Hong Kong on Wednesday after it said had faced protests from workers about layoffs and unpaid wages earlier this week at its yard in Jiangsu Province. Chinese media have reported the protests.
In a Tuesday statement, Rongsheng said, without giving a number, the job cuts are a result of ongoing restructuring geared to making more specialized vessels to serve the offshore energy industry under a strategy to focus on new markets in response to a slump in the shipbuilding industry.
It set up an offshore marine equipment unit in Singapore last year.
"We expect a continuing deterioration in the balance sheet given weak demand growth for bulk vessels," Barclays said.
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