HHI gets involved in taking over Daedong

Hanjin Heavy Industries (HHI) has expressed interest in the mergers and acquisitions negotiations for Daedong Shipbuilding, which is under court-receivership.

According to HHI on July 2, it handed in an LOI (Letter of Intent) to the KPMG, an American consulting company to take over the Daedong Shipbuilding M&A case on June 29.

Besides HHI, several other companies have expressed their interest in the M&A of Daedong Shipbuilding. The take-over company will be decided on in mid to late August.
It is said that HHI is eager to take-over Daedong Shipbuilding in its search to improve its competitiveness and add to its vessel-building capacity.

An official at HHI stated, "things are getting harder and harder, especially with the shipbuilding disputes with the European Union." "Shipyard facilities are abundant throughout the world, and we would like to take over Daedong Shipbuilding and make use of its facilities rather than build new shipyard facilities," he went on to explain.

However, the City of Pusan and regional economic circles worried about the shipyard moving from Pusan after Daedong Shipbuilding's take-over.

If HHI, the top regional enterprise with sales of 1.9 trillion won last year and the only enterprise to rank within the top 100 enterprises nationwide based on sales volume, moves its shipyard to Jinhae, it may adversely affect the shipbuilding and materials industries, causing them to shrink and further cause labor cuts.

"The Daedong Shipbuilding take-over aims at acquiring competitiveness through increasing our ship building capacity. We invested a lot in the Youngdo shipyard to settle building systems and it worked very well. We have no intention on moving in the near future," an HHI official said.