The world’s second-largest shipbuilder has split itself into four companies, a move that would facilitate a potential sale of some of the businesses.
Hyundai Heavy Industries Co yesterday began trading as four entities as the conglomerate tries to insulate the group from a financial crisis at any one of its divisions.
The breakup splits the operations into businesses focused on shipbuilding and offshore projects, electric machinery, construction equipment and industrial robots. The combined market value of the four companies is about 16.8 trillion won (US$14.8 billion), compared with 12.5 trillion won when trading in Hyundai Heavy was halted in March.
The dismantling of Ulsan, South Korea-based Hyundai Heavy is the latest restructuring in the nation’s ailing shipbuilding industry, home to the world’s top three vessel manufacturers.
The shipbuilders have cut more than 20,000 jobs and sold assets as orders dwindled amid excess capacity and depressed crude oil prices in the past three years that led clients to curtail spending on offshore projects.
Hyundai Robotics Co, Hyundai Electric & Energy Systems Co and Hyundai Construction Equipment Co are the three other companies formed after the split.
“We will focus on growth opportunities for the individual companies,” a Hyundai Heavy group spokesman said in response to queries on a possible sale of the spun-off entities. “We will invest for future growth of these units to meet our goal of each becoming a top-five company in their sectors.”
The new Hyundai Heavy, based on the spun-off structure, had sales of 23.7 trillion won last year, accounting for 60 percent of the group’s total before the breakup.
The spinoff cut the shipbuilder’s net debt by half and reduced its debt-to-equity ratio to 95.6 percent at the end of March from 106.1 percent at the end of last year.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
The US stock market has been on a tear, yet the country’s economy is in the dumps. So why do so many people believe — undoubtedly incorrectly — that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors. The surprising conclusion: The most visible and economically vulnerable