It failed to sell its assets due to weak industrial demand.
ST Engineering announced that Jiangsu Huatong Kinetics Co., Ltd and Jiangsu Huaran Kinetics Co., Ltd (collectively JHK) have filed a bankruptcy petition to the People’s Court of Dantu District in Zhenjiang, Jiangsu. This follows when JHK was placed under members’ voluntary liquidation.
JHK is the joint venture between ST Engineering’s land systems arm, ST Kinetics and China’s state-owned enterprise Jiangsu Huatong Machinery Co., Ltd.
ST Engineering has fully written down its investments in this JV business having recorded the $61m one-off charge for Q3 2016, consisting of an impairment of ST Kinetics’ net carrying value in JHK and closure costs including staff compensation.
"The shareholders of JHK have agreed on this course of action to avoid further cash outlay by the company, as JHK was not able to dispose of its assets (land and buildings) despite its best efforts for more than a year to secure buyers due to the weak demand for industrial properties in the Zhenjiang area," the company said.
Prior to this, the company had resolved staff matters, including welfare, and compensation settlement.
"The bankruptcy petition is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year," the company said.
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