Hyundai Heavy splits into 4 in bid to avert financial crisis
SINGAPORE: The world’s secondlargest shipbuilder has split itself into four companies, a move that would facilitate a potential sale of some of the businesses.
Hyundai Heavy Industries Co started trading as four entities yesterday 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 now is about 16.8 trillion won (RM69.55 billion), versus 12.5 trillion won when trading in Hyundai Heavy was halted in March.
The dismantling of Ulsanbased Hyundai Heavy is the latest restructuring round in the country’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.
Last month, Daewoo Shipbuilding & Marine Engineering Co averted a payment crisis after bondholders agreed to bail out the company.
Daewoo, Hyundai Heavy and Samsung Heavy Industries Co are the world’s top three shipbuilders. Bloomberg