Hyundai Heavy Industries (HHI) has announced today that it will implement a management improvement plan by 2018 worth 3.5 trillion won (US$3 billion).
According to the plan, HHI will secure 1.5 trillion won with the sell-off of its shares of Hyundai Motor and KCC, its stakes in Hyundai Avancis, and certain properties and receivables. It will also secure 900 billion won with an employee salary cut and work-sharing. 1.1 trillion won is expected with the spin-off and sell-off of a part of its business, and the reorganisation of affiliated companies.
HHI is also considering a contingency plan that will secure an additional 3.6 trillion won in case of need.
Once the plan is in place, HHI expects that its liabilities-to-equity ratio will drop from the current 134 per cent to 80 per cent by 2018. The total debt will also be cut down by about 2.0 trillion won to 6.6 trillion won.
In the first quarter of 2016, HHI swung to a profit of 325.2 billion won, putting an end to a nine-quarter losing streak.