Shareholders of the South Korean shipbuilder Hyundai Heavy Industries (HHI) approved on Monday the firm’s plan to reorganize its businesses into separate companies with the aim of improving its financial status.
Following the shareholders’ approval, HHI will be split into four sectors – shipbuilding, electronics, construction equipment and robotics. The new companies are expected to be formed in April 2017, the company confirmed in a listing on Korea Exchange.
As a result HHI has announced trading suspension of its stock, scheduled for March 30-May 9, 2017.
Announced in November 2016, the plan is part of the HHI’s self-rescue scheme to reduce indebtedness. The company said in November it will split into six units – Hyundai Robotics, Hyundai Heavy Industries, Hyundai Electric & Energy Systems, Hyundai Construction Machinery, Green Energy, and Global Services. The service department and green energy were already set up in December last year.
The decision to restructure HHI’s businesses comes despite a series of protests from unions. HHI employees have organized strikes as the restructuring could bring job insecurity for relocated workers as well as for some 13,000 unionized employees to be left behind.
In 2016, the shipbuilder implemented a number of revamping measures to bolster its competitiveness including a management improvement plan.
These measures helped HHI return back to profit as the shipbuilder reported a net profit of KRW 682.3 billion (USD 596.6 million) for the full year of 2016, compared to a loss of KRW 1.36 trillion (USD 1.18 billion) seen in 2015.
World Maritime News Staff