Under the business division plan, HHI will spin-off its non-shipbuilding businesses and retain its core businesses including shipbuilding, offshore and machinery plant.
HHI confirmed that its current shipbuilding, offshore & engineering, and engine & machinery division will form new HHI. The existing non-shipbuilding segments like electro electric systems, construction equipment, robotics, green energy division and integrated AS unit will be separate business entities tentatively named as Hyundai Electric & Energy System, Hyundai Construction Machinery, Hyundai Robotics, Hyundai Heavy Industries Green Energy, and Hyundai Global Service, respectively.
The spin-off plan as part of the group’s restructuring plan has been submitted to creditors. HHI expects the separation to be completed on 1 April 2017.
"So far we have been placing an emphasis on disposal of non-core assets and businesses as part of management rationalisation measures," a HHI official said.
"Now is time for us to shift our focus to foster core businesses of to-be-established business entities. And the spinoff is the starting point," he said.
During the past months, HHI has been active in selling or liquidating non-performing units including Hyundai Cummins, Jake and Hyundai Avancis, and disaffiliation of Hyundai Corp, Hyundai Finance Corp and Hyundai Venture Investment Corporation.
The official added: "The spin-off is one of the final measures in the KRW3.5trn ($3bn) worth management improvement plan we drafted for creditors in May this year."
The severe downturn of the shipbuilding industry has led to heavy losses at South Korean shipbuilders, with the country’s big three yards, HHI, Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering (DSME) all going through restructuring by disposing of non-core assets and slashing jobs.