Rongsheng Heavy, SINOSURE Pen Blanket Insurance Agreement

Rongsheng Heavy, SINOSURE Pen Blanket Insurance Agreement

China Rongsheng Heavy Industries Group Holdings Limited has recently signed a blanket insurance coverage agreement with China Export & Credit Insurance Corporation (SINOSURE).

Under the terms of the agreement, SINOSURE will provide China Rongsheng Heavy Industries with multiple insurance products and services, which includes Insurance against Buyer’s Breach of Contract, offering comparatively favorable rates and customized terms and conditions. By securing more financial protection from the government for future new orders, this agreement will contribute to lowering the Group’s operational risk and enhancing their overall competitiveness.

As a major state-owned insurance company involved in providing export and credit insurance services in Mainland China, SINOSURE will provide a financing arrangement service package to China Rongsheng Heavy Industries. The package will enable the two corporations to cooperate in various aspects. For instance, SINOSURE will cover risks under Insurance against Buyer’s Breach of Contract to support financing activities before delivery, and the company would also provide Export Credit Insurance services to help ship owners complete financing during the negotiation process of new orders.

Cooperation between the Group and SINOSURE dates back to 2007, before a strategic cooperation agreement was signed in September 2009. Business between the two corporations began with refund guarantee of advance payment under shipbuilding contract, and now extends to the Insurance against Buyer’s Breach of Contract and Export Credit Insurance, with other potential relevant services still under negotiation. From 2010 to 2012, in terms of business volume of Insurance against Buyer’s Breach of Contract, the Group ranked among the first three biggest clients of SINOSURE nationwide.

Tailored for Chinese export businesses, the Insurance against Buyer’s Breach of Contract covers risks that occur when an export business faces the buyers’ violation of contract terms. Once certain risks occur, for instance with the cancellation of orders, any loss of enterprises and involved banks would be covered by the insurance contract.

Since 2011, several banks in Mainland China have stipulated new requirements for the Insurance against Buyer’s Breach of Contract during the application process of construction loans. After signing the blanket insurance coverage agreement with SINOSURE, China Rongsheng Heavy Industries will not only further minimize their operational risks, but will also solidify their position to acquire construction loans, which will in turn help the Group to gain new orders.

[mappress]

Press Release, June 7, 2013