Painstaking Self-rescue
Hyundai Heavy Industries announced on May 9 that it would halt the operation of some dry docks for a while to be prepared for the lack of new shipbuilding orders.
At present, Hyundai Heavy Industries has 11 docks in Ulsan City and its subsidiaries Hyundai Samho Heavy Industries and Hyundai Mipo Dockyard are running three and four docks, respectively. Hyundai Heavy Industries recorded an order backlog of US$43.7 billion, an 11-year low, last month and the company has obtained no more than three orders since the beginning of this year. During the same period, the number was only two for Hyundai Samho Heavy Industries and one for Hyundai Mipo Dockyard.
Hyundai Heavy Industries is planning to submit a cost reduction plan to Hana Bank, its main creditor bank, within this week as well. The plan is predicted to include the sale of its non-core real estate assets and Hyundai Motor Company shares for the company to save up to two trillion won in costs. The company currently has outstanding loans worth a total of 2.6584 trillion won in the main creditor bank. At the same time, it is in possession of 1.235 million Hyundai Motor Company shares along with a 91.13% stake in Hyundai Oilbank, a non-listed company, and the latter is estimated to have a book value of 2.9547 trillion won.
Hyundai Heavy Industries is forecast to lay off 5% to 10% of its employees, 2,000 to 3,000 in number, too. It reduced the number of its executives by 25% last month in the same context. The Hyundai Heavy Industries Trade Union is opposed to the company’s voluntary retirement and redundancy programs, claiming that it is trying to shift the blame to them.