South Korean shipbuilder Hanjin Heavy Industries & Construction has admitted that it is in the middle of arranging a sale of its subsidiary companies.
In a Korea Exchange filing on 10 July, HHIC said it is working with its NH Investment & Securities and Korea Development Bank to sell energy companies Daeryun E&S and Byeollae Energy.
HHIC said, “Nothing concrete has been firmed up and we hope to announce more details in the next six months.”
HHIC, which has debts of about KRW3 trillion (USD2.6 billion), has been burdened by sluggish margins at its Busan yard even though it has allotted most of its ship construction work to its Subic Bay yard.
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The shipbuilder was also burdened by fines imposed by South Korea’s Fair Trade Commission last year.
In November 2014, the commission imposed KRW15.2Bn in fines on seven construction firms, including HHIC, for colluding to rig bids for constructing dams and reservoirs on the Han, Nakdong and Geum rivers.
The commission’s investigations showed Hanjin and Dongbu conspired to win Korea Water Resources Corporation’s contract to build a dam on the Nakdong River.
The two companies fixed their bids so that HHIC could be awarded the contract at a higher price. In return, HHIC bought golf memberships worth KRW4Bn from a golf course owned by Dongbu.