Hanjin Heavy Industries & Construction (HHIC)'s stock trading, which had been suspended due to full capital erosion, resumed on May 21. HHIC fell into joint insolvency after its subsidiary, the Philippines-based Subic Shipyard, posted losses for the third consecutive year and applied to a local court for corporate rehabilitation.
After HHIC fell into a capital erosion state, the Korea Exchange suspended trading of Hanjin Heavy Industries shares on Feb. 13. HHIC's guarantee for Subic Shipyard reached $410 million.
Creditors, including the state-run Korea Development Bank, finalized a plan in February to normalize its management that includes debt-for-equity swaps worth about 680 billion won and a differential capital reduction without refund, and also agreed to debt restructuring with local banks in the Philippines.
"Not only did we shake off the insolvency of Subic Shipyard, which was a management risk, but we completed the debt-for-equity swap involving major shareholders of domestic and foreign banks such as Korea Development Bank, so the financial structure has become more solid," a HHIC official said. "We will focus our efforts on normalizing management in the future."
HHIC is seeking to sell real estate worth 1.2 trillion won to improve its financial structure. For the site behind Incheon's northern port, it completed the selection of a preferred bidder earlier this month to sell 100,000 square meters out of the total land (170,000 square meters) for 131.4 billion won.
HHIC plans to make all-out efforts to boost its capacity and profitability in both the shipbuilding and construction sectors, its main business units, this year.
The shipbuilding sector plans to focus on building and winning orders for special ships, including warships, while the construction sector will focus on securing profitability.
HHIC's shipbuilding unit has secured work worth 1.6 trillion won for 23 special ships, including naval vessels, as of the end of April. The construction sector has filled about 220 billion won in order backlogs this year.