China Shipbuilding Industry Co. announces IPO

As I have mentioned before, China will become more and more dominant in the world economy. You can whine all you want, but there is no stopping them. They seem to have a fairly solid economic plan, and are rolling it out, little by little.

They have been making steel. Now they will increase production of one of many products made from steel; ships.

From Bloomberg

Dec. 4 (Bloomberg) -- China Shipbuilding Industry Co., the nation’s largest maker of vessel equipment, plans to raise as much as 14.7 billion yuan ($2.15 billion) in Shanghai in the country’s third-largest initial public offering this year.
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The Chinese government wants locally made components to account for 80 percent of Chinese-made vessels by 2015, as part of a wider drive to surpass South Korea as the world’s biggest shipbuilding nation.
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China Shipbuilding will use about 4.3 billion yuan of the proceeds to construct production capacity for ship engines and parts, according to a draft prospectus Nov. 25. Another 1.45 billion yuan will be used for producing additional marine auxiliary machinery, while the remaining 673 million yuan will be to finance an expansion of transportation equipment.

The company plans to offer 45 percent of the shares available to institutional investors through an offline sale, while the remaining 55 percent will be offered to both institutional and individual investors in an online tranche.

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Samsung won't let CSAV renegotiate ship purchase

Samsung Heavy Industries, which is a shipbuilder, refuses to let CSAV cancel some orders for new ships they placed 2 years ago.

CSAV is in pretty severe financial trouble. They were going to get some concessions from German shipowners with whom they have charters, but now that Samsung is not budging, who knows.

You would think Samsung would look at what happened today with Chrysler. They filed for bankruptcy protection because some of the hedge funds who held their bonds wanted too much money.

I presume Chile (where CSAV is based) offers a company bankruptcy reorganization protection, as we do in the U.S.

If so, I think that is the only hope CSAV has to get out of this mess. Unless someone wants to buy them, which I doubt.

Here's more info from Lloyds List

CSAV in crisis as Samsung rebuffs rescue efforts

Patrick Hagen and Janet Porter - Thursday 30 April 2009

THE survival of embattled Chilean shipping group CSAV could rest with South Korean shipbuilder Samsung Heavy Industries after German owners attending crisis talks in Hamburg in April attached conditions to a rescue plan.