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.
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