(Yicai Global) Oct. 18 -- China Zhongwang Holdings, the world’s second-biggest aluminum extrusions maker, said two key subsidiaries are having serious operating difficulties.

Liaoyang Zhongwang Refined Aluminum and Liaoning Zhongwang Group could not resolve the difficulties on their own despite trying, their parent company said on Oct. 15 without specifying the nature of the problem.

China Zhongwang suspended trading of its shares on Aug. 27 after not being able to release its semi-annual earnings report before Aug. 31. The Liaoning-based firm’s share price [HKG:1333] last traded at HKD1.68 (32 US cents), down more than 35 percent from this year’s high.

Founded in 1993, China Zhongwang mainly produces aluminum for the rail transit, auto, shipping, aviation, and machinery industries. The firm’s net profit slumped 42 percent to CNY1.84 billion (USD285.9 million) last year from 2019, while revenue rose 1.8 percent to CNY20.4 billion (USD3.17 billion).

The company said on March 17 that it planned to list in Shanghai through a reverse merger of its key aluminum extrusions business with Cred Holding. The move followed four failed attempts to return to the Chinese mainland stock market. But the real estate developer canceled the CNY30.5 billion deal in view of the market environment.

China Zhongwang was to have sold 96.55 percent of its stock in Liaoning Zhongwang Group, worth CNY200 million, to Cred in exchange for all of Cred’s unit in the Xinjiang Uygur Autonomous Region.

Six companies connected to Liu Zhongtian, China Zhongwang’s actual controller and Liaoning’s former richest man, were convicted by the US government in August for allegedly smuggling large amounts of aluminum into the country and evading USD1.8 billion in antidumping and countervailing duties.

Editor: Futura Costaglione