Hyundai Heavy Industries Co. has officially split the company into four distinct trading entities as of May 10.
The move to restructure the South Korea-based company is only the latest round of layoffs for the shipbuilding conglomerate. More than 20,000 jobs and sold assets were ordered to offset losses due to a reduction in offshore projects.
The new companies include Hyundai Robotics Co., Hyundai Electric & Energy Systems Co. and Hyundai Construction Equipment Co. As a response to this move, the combined value for the companies is now at $14 billion.
As of March, the company had announced that it planned to invest $3.5 trillion into technology development of which Hyundai Construction won $660 billion. The company states that the move will help facilitate future growth for each company.
"We will focus on growth opportunities for the individual companies," a Hyundai Heavy group spokesman stated. "We will invest for future growth of these units to meet our goal of each becoming a top-five company in their sectors."
Financial analysts have weighed in with their own take on the split, "The possibility of selling non-core operations is high as the group wants to focus on the main business and raise funds to support that," said Um Kyung-a, an analyst at Shinyoung Securities Co. in Seoul.
With each business traded separately, those looking to get into the construction business wouldn't have to worry about the shipbuilding industry or robotics and vice versa which is crucial for investment strategies.
Source: Bloomberg L.P.
