The board of shipbuilding giant Hyundai Heavy Industries (HHI) has announced its decision to break up the firm into six separate companies.
The new Hyundai Heavy Industries will contain the shipbuilding arm, along with the Offshore & Engineering and Engine & Machinery divisions.
The non-shipbuilding-related divisions of the firm, including the provisionally named company Hyundai Construction Machinery, will operate as separate business entities.
An official from HHI said, “Despite the different natures and sectors they operate in, our existing non-shipbuilding divisions have been operated and managed under an umbrella of Shipbuilding Division. In the process, we have witnessed inefficiency in the management of company. Due to the structure, divisions with a smaller portion of company-wide sales have not been well positioned to secure independent competitiveness.”
The official added, “The spin-off is one of the final measures in the KRW 3.5 trillion [US$ 2.98 billion] management improvement plan we drafted for creditors in May this year. By carrying out the plan preemptively, we aim to regain trust from the market and lay the solid foundation for take-off.”