Rongsheng’s warrant issue on the ropes as investor goes missing

Embattled mainland shipbuilder China Rongsheng says it has been unable to contact would-be investor Wang Ping following media reports that he has been detained by Beijing police.

“The company has no information as to the details of the incident and has been unable to contact [Wang], which casts doubt over [his] ability to perform [his] obligations under the [warrant] subscription agreement prior to [the March 31 deadline],” it said in a filing to Hong Kong’s stock exchange.

Rongsheng’s board had decided “it is not in the best interests of the company and its shareholders” for it to proceed with the warrant issue. Together with the issuance of a convertible bond last year, the warrant issue would have seen Wang, a mainland private equity investor, become its largest shareholder with a 27.5 per cent stake.

The board said it would seek legal advice on what to do regarding an extraordinary shareholders meeting scheduled for March 13 to approve the issue.

The warrant’s sale was supposed to raise HK$510 million, and the exercise of the share subscription rights attached to the warrant was supposed to raise HK$2.55 billion to HK$3.23 billion, depending on the exercise date.

The proceeds were intended to fund resource exploration and development work on four oilfields in Kyrgyzstan.