Hyundai Heavy eyes financials
May 29, 2008
Hyundai Heavy Industries Company, Korea’s third-biggest company by market value, is in talks to acquire holdings in two units of the CJ Group to manage assets and offer ship financing.“We are in detailed talks to buy stakes in CJ Investment and Securities Company and CJ Asset Management Company and will make an announcement when details are finalized,’’ the Ulsan-based shipbuilder said in a filing yesterday. The stakes are worth about 800 billion won ($770 million), the Korea Economic Daily reported yesterday, citing unidentified industry officials. Hyundai Heavy, the world’s biggest shipyard, and units Hyundai Mipo Dockyard Company and Hyundai Samho Heavy Industries Company have combined cash assets of about 6 trillion won, and are slated to report record earnings for a fourth year. The acquisition would allow Hyundai Heavy to fund expansions and help customers finance costlier ships, said analyst Lee Jae Kyu.“Hyundai Heavy may be interested in buying the financial companies to manage its abundant cash,’’ said Lee, who rates Hyundai Heavy a “buy’’ at Mirae Asset Securities Company in Seoul. The acquisition would be the first for Hyundai Heavy since 2002 when it bought rival Hyundai Samho Heavy for 100 billion won. Hyundai Heavy plans to seek board approval for the purchase tomorrow, the Korea Economic Daily said.Hyundai Heavy would be the latest entrant to the country’s 44.6 trillion won brokerage industry after regulators lifted entry barriers last year to increase competition. Hyundai Motor Company, Korea’s largest automaker, and its affiliates bought 30 percent of Shinheung Securities Company in March, which was renamed Hyundai IB Securities Company. Bloomberg
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