Hyundai Heavy splits into 4 in bid to avert fi­nan­cial cri­sis

New Straits Times - - Business / World -

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

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