Hyundai Heavy to reorganize businesses to regain competitiveness

Hyundai Heavy Industries Co., the world's biggest shipbuilder by orders, said Tuesday it will reorganize its businesses into six separate companies next year in its latest efforts to regain competitiveness and financial health.

The top shipbuilder held a board of directors meeting on Tuesday to spin off its wide-ranging businesses into six business divisions -- shipbuilding-offshore plant-vessel engines, electric and electronics, construction equipment, renewable energy, robotics, and services -- by the first half of next year, the company said.

The decision comes in the form of part of the shipyard's self-rescue plans announced early this year in which it said it will seek the sale of non-core assets and job cuts to lower its debt-to-equity ratio below 100 percent by 2018.

"We have so far put a focus on selling non-core businesses. From now on, we will focus all our capabilities on nurturing the core business in each division. The spinoff will be the starting point to achieve the goals," a company official said.

Hyundai Heavy shifted to a net profit of 971.19 billion won (US$832 million) in the January-September period from a net loss of 985.17 billion won a year earlier. It was a meaningful achievement because the company has struggled with oversupply and declining orders since the 2008 financial crisis.

Hyundai Heavy and the world's leading Korean shipbuilders such as Samsung Heavy Industries Co. and Daewoo Shipbuilding and Marine Engineering Co. have undergone the same fate following the crisis that hit the shipping and construction sectors as well.

Source: Yonhap News Agency

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