Hyundai Genuine readies reorganization, recapitalization to become global No. 5

Hyundai Heavy Industries Group will groom its new global No. 9 construction equipment unit with Doosan Infracore under its arm to No. 5 with revenue of 10 trillion won ($8.6 billion) by 2025 through organizational rationalization and recapitalization of 800 billion won within the year.

Capital clean-up and fueling is the first task for the new company, according to its business outline unveiled Wednesday by Hyundai Genuine Co., holding entity that took off last month to oversee Hyundai Construction Equipment and Doosan Infracore the group had bought for nearly 900 billion won.

Doosan Infracore will be recapitalized after stock retirement, a scheme possible upon approval at a shareholders’ meeting. It plans to carry out capital reduction at a ratio of 5:1 based on face value that won’t change its net asset value and share numbers.

It will issue up to 800 billion won worth new shares to its parent to acquire a 20 percent stake in Doosan Infracore China, pay back debts, speed up digital transition and invest in new technologies such as for eco-friendly technical capabilities for future growth.

Separately, Hyundai Genuine will absorb the industrial vehicle business of Hyundai Construction Equipment in December to improve its business competitiveness through direct investment and support.

Hyundai Construction Equipment then will acquire Korea Shipbuilding & Offshore Engineering’s overseas heavy equipment operations in China and Brazil and focus on strategic sales and manufacturing customized to each market for better profitability. KSOE is Hyundai Heavy Industries’ another intermediate holding entity that controls the group’s shipbuilding units.

Hyundai Construction Equipment also will seek for a merge with Hyundai Core Motion’s management and maintenance unit to reinvest what it earns from selling equipment parts.
Source: Pulse