Hyundai Heavy seeking to sell brokerage unit

SEOUL, July 14 (Yonhap) -- Hyundai Heavy Industries Co., a troubled shipyard, is seeking to sell its brokerage unit as part of its restructuring drive, but its bid may fall through due to lack of potential investors, industry sources said Thursday.

According to the sources, Hyundai Heavy plans to sell an 85.3 percent stake in HI Investment & Securities Co. which is held by its affiliate, Hyundai Mipo Dockyard Co., a deal estimated at around 500 billion won (US$439 million).

Hyundai Heavy plans to complete the sale of the brokerage unit by the end of the year.

Hyundai Heavy took over the brokerage firm, formerly known as CJ Investment & Securities Co., in 2008, and has spent a total of 1.12 trillion won for the takeover and the participation in the new stock offering.

Potential bidders include Korea Investment & Securities, Shinhan Financial Group and a slew of mid-tier financial companies, but they have not shown keen interest in buying the brokerage house, the sources said.

South Korean shipbuilders have been under severe financial strain since the 2008 global economic crisis which sent new orders tumbling amid a glut of vessels and tougher competition from Chinese rivals.

The country's top three shipyards -- Hyundai Heavy, Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. -- suffered a combined operating loss of 8.5 trillion won last year. The loss was due largely to increased costs stemming from a delay in the construction of offshore facilities and an industry-wide slump, with Daewoo Shipbuilding alone posting a 5.5 trillion won loss.

The shipbuilders have recently drawn up sweeping self-rescue programs worth 10.35 trillion won in desperate bids to overcome the protracted slump and mounting losses.

sam@yna.co.kr
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