HHI investors approve spinoffs

Hyundai Heavy Industries’ plan to split the company into four independent corporations was approved by shareholders Monday, despite ongoing protests by labor unions that involved physical fights.

According to the shipbuilder, 66 percent of the voting shares participated in the meeting at Hanmaeum Arts and Culture Center operated by the shipbuilder in Ulsan, and 98 percent of them agreed to the spinoffs. The company needed a majority of the shareholders to attend the meeting and two-thirds of them to agree.

“The spinoff is a decision made to ramp up each business division’s capability and value amid an ongoing slump in the industry,” said Kang Hwan-goo, president of HHI.

“We will make each separate corporation a competitive unit in their industries and maximize shareholders’ value as well.”

HHI will be divided into four separate corporations by business division in April.

Apart from HHI, which will keep its name and company’s core businesses including shipbuilding, offshore plant and engines, the other three companies are tentatively named Hyundai Electric & Energy System, Hyundai Construction Equipment and Hyundai Robotics.

In the process, Hyundai Robotics will be converted into a holding company of HHI by absorbing a 13.4 percent share of HHI and 91.13 percent of the company’s oil refining affiliate Hyundai Oilbank.

The company added the spinoff can greatly improve the company’s financial structure by lowering the debt ratio to below 100 percent, in a statement Monday.

While the shipbuilder had more than 7 trillion won ($6.17 billion) in debt, it will allot more than 3 trillion won debt over its spinoffs and reduce holding debt of the shipbuilding unit. The improved financial structure of the shipbuilder is expected to also improve its credit rating and help it win overseas projects, according to analysts.

However, the labor union on the same day called the shareholders’ meeting “undemocratic and violent,” and struggled with the company staffs and police officers on site. Uproar and disturbances halted the two-hour meeting four times, according to an HHI spokesperson.

The labor union also carried out its third day of full-fledged strikes after two days of consecutive walkouts last week.

“Management say that they will guarantee our employment but those promises will only be valid this year since we have to renegotiate with the newly separated companies,” a spokesperson for the union said.

As the labor union remains angry about the result of the meeting, a further struggle is expected even as the spinoff is completed.

In the meantime, trading of HHI shares on the stock market will be suspended from March 30 through May 9 until separate corporations are listed and opened for trading on May 10.

BY KIM JEE-HEE [kim.jeehee@jongang.co.kr]