Halla creates holding company from MandoHalla Group, the nation’s 39th-largest conglomerate, run by Chairman Chung Mong-won, is changing its management structure by splitting Mando Corporation in two to create a holding company.
Shareholders of Mando, Korea’s second-largest auto parts manufacturer, met at the company’s headquarters in Pyeongtaek, Gyeonggi, where they voted 74 percent in favor of splitting the group into a holdings company called Halla Holdings and an auto parts business Mando.
The separation will occur on Sept. 1, and Mando will be re-listed on the stock exchange on Oct. 6. Trading of Mando shares will be suspended from Aug. 28 to Oct. 5 and the existing owners of Mando will get 0.48 shares of Halla Holdings and 0.52 shares in Mando.
Halla Group had a cross shareholding structure among Mando, Halla Meister, Halla Corp., but the new holding company will cut the tie between Mando and Halla Corp.
Halla Corp., the nation’s 19th-largest builder, owns a 17.29 percent stake in Mando but will sell it to Halla Holdings. Mando will still have its subsidiaries including Mando China Holdings, Mando Brose, and Mando Advanced Materials, but will be solely focused on auto parts.
Industry insiders said that the separation signals that no additional support will be given to Halla, which has been facing a liquidity crisis amid a slump in the construction industry.
“By adopting a holding company structure, we are boosting the clarity of management by not supporting poor affiliates and also by solving the cross-shareholding problem,” said Mando Vice Chairman and CEO Shin Sa-hyeon.
Mando yesterday said that its second quarter operating profit was 90.9 billion won ($88.6 million), up 0.6 percent from a year ago. Its second quarter revenue was down 2.9 percent year-on-year to 1.41 trillion won.
BY joo kyung-don [email@example.com]