South Korean Hyundai Heavy Industries’ (HHI) shareholders have approved a plan to split the company into six separate entities from April this year despite objections from the company's union employees.
The shareholder motion splits the world's largest shipbuilder into six separate companies – a shipbuilding entity, plus five independent firms derived from the conglomerate's electronics, robotics, services, alternative energy and construction equipment divisions.
All of the subsidiaries should be publicly listed and running independently by May, and trading in HHI will be suspended until the restructuring is complete.
HHI's breakup is driven in part by a stark reversal in fortune for South Korean shipbuilders. All of the nation's "Big Three" yards posted losses in 2015, with revenues and ordering pushed down by the simultaneous decline of the shipping and offshore sectors. In response to dwindling orderbooks, the shipbuilders have closed yards, sold off non-core assets, renegotiated terms of credit and reduced their headcounts. They have already laid off thousands of workers, and they are expected to let go an additional 4,000 by the end of this year, maritime-executive reported 27 February.