South Korea’s Hyundai Heavy Industries Holdings Co. is changing its name to HD Hyundai as the holding company of the world's largest shipbuilding group is seeking to transform into an entity focused on new growth drivers.
The group’s board of directors approved the name change on Thursday, and the decision will be finalized at its shareholders’ meeting on March 28.
“The name change is in line with our group’s aim to shed its image as a traditional manufacturer and turn into a company tasked with exploring new investment opportunities, including M&As,” Hyundai Heavy said in a statement.
The company said HD represents the group’s determination to achieve “human dreams” by utilizing “human dynamics.”
The group’s current shareholding structure was established in 2018 when the conglomerate restructured itself into three main businesses – shipbuilding, energy and industrial machinery – and placed them under a holding firm system.
The three core businesses are led by Korea Shipbuilding & Offshore Engineering (KSOE), Hyundai Oilbank Co. and Hyundai Genuine Co., respectively.
Hyundai Heavy Industries Holdings Co.'s new name, HD Hyundai KSOE, under its wing, owns three shipbuilding affiliates – Hyundai Heavy Industries Co., Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co.
Other major subsidiaries of the shipbuilding group include Hyundai Robotics Co., Hyundai Electric & Energy Systems Co., and Hyundai Global Service Co.
INVESTMENT IN NEW GROWTH ENGINES
The group’s holding firm has already been working as an investment company over the past few years.
In 2020, it launched Avikus, the group's in-house startup specializing in the development of autonomous marine navigational systems.
In the same year, Hyundai Heavy Industries Holdings signed a memorandum of understanding to jointly set up a 1 trillion won ($831 million) fund with Korea Investment Corp. (KIC) for equity investment in promising global startups.
In August 2021, Hyundai Future Partners, the investment arm of Hyundai Heavy Industries Holdings, acquired MediPlus Solution, a mobile healthcare solution company.
Last year, the holding company posted an operating profit of 1.09 trillion won, a turnaround from a loss of 597 billion won the previous year. Sales rose 35% to 25.6 trillion won from 18.9 trillion won.
Chung Ki-sun, CEO of Hyundai Heavy Industries Holdings ‘FUTURE BUILDER’
Chung Ki-sun, chief executive of the holding company, in his New Year’s speech in January, termed the group a “future builder” pursuing sustainable, smarter and more inclusive growth.
As part of its efforts to raise funds for investments in new growth engines, the group is seeking to list two affiliates, Hyundai Oilbank and Hyundai Samho Heavy, on the Korea Exchange this year.
Hyundai Samho Heavy has also vowed to go public by year-end as agreed with its key investor IMM Private Equity.
The conglomerate will also have enough cash for its M&A efforts following the collapse of a deal to acquire crosstown rival Daewoo Shipbuilding & Marine Engineering Co. earlier this year.
Analysts said Hyundai Heavy will find a silver lining from the collapsed deal, on which the company saved as much as 6 trillion won it otherwise would have spent to acquire the debt-laden competitor.
Meanwhile, the holding company said on Thursday it has acquired a total of 2.9 million shares in KSOE, amounting to a 4.1% stake, for 251.4 billion won, from KCC Corp. and Asan Foundation. Following the purchase, its stake in KSOE has increased to 35.05%.
“We’re buying the stake to secure stable management rights and strengthen our responsible operation of KSEO,” it said.
Write to Jung-hwan Hwang at jung@hankyung.com In-Soo Nam edited this article.
