Privately-owned Yangzijiang Shipbuilding has moved to assure investors in relation to the group's exposure to informal lending in China, Seatrade Asia reported.
Singapore-listed Yangzijiang said its investment in two micro-financing entities in Jiangsu Runyuan Rural Microfinance and Wuxi Runyuan Technology Microfinance amounts to RMB247.5m ($38.8m) - less than 3% of the group's net tangible assets and less than 2% of the group's market capitalisation of S$3.58bn ($2.83bn).
Yangzijiang owns 51% equity interest in Jiangsu Runyuan and 31.5% in Wuxi Runyuan.
“Loan tenures are mostly short-term, repayable within a year and backed by quality collaterals,” Yangzijiang said in a statement on Monday.
The shipbuilder emphasised that both Jiangsu Runyuan and Wuxi Runyuan are licensed entities and interest rates charged on outstanding loans are within the Chinese banking system's authorised bands.
“The group's policy is to insist that the collateral to debt coverage ratio to be no less than two times and the collaterals have to be unencumbered,” Yangzijiang said, adding that it has not experience any default of such investments since 2008.
Singapore-listed Yangzijiang said its investment in two micro-financing entities in Jiangsu Runyuan Rural Microfinance and Wuxi Runyuan Technology Microfinance amounts to RMB247.5m ($38.8m) - less than 3% of the group's net tangible assets and less than 2% of the group's market capitalisation of S$3.58bn ($2.83bn).
Yangzijiang owns 51% equity interest in Jiangsu Runyuan and 31.5% in Wuxi Runyuan.
“Loan tenures are mostly short-term, repayable within a year and backed by quality collaterals,” Yangzijiang said in a statement on Monday.
The shipbuilder emphasised that both Jiangsu Runyuan and Wuxi Runyuan are licensed entities and interest rates charged on outstanding loans are within the Chinese banking system's authorised bands.
“The group's policy is to insist that the collateral to debt coverage ratio to be no less than two times and the collaterals have to be unencumbered,” Yangzijiang said, adding that it has not experience any default of such investments since 2008.
Meanwhile, the shipbuilder updated it is on schedule to meet its vessel deliveries target of 65 in the financial year 2011, compared with that of 50 in 2010.