Hanjin Heavy Industries § Construction Co, Ltd ("HHIC") was formerly Korea Shipbuilding & Engineering Company (KSEC), until financial difficulties led to its take-over by the Hanjin Group in 1989. After being acquired by the Hanjin Group, the newly constituted HHIC continued to accumulate losses and in 1992 underwent reorganisation and debt rescheduling.79
HHIC is a member company of the Hanjin Group and is active in shipbuilding, ship repair, construction, plant engineering and logistic s engineering. In fact, the range of business activity expanded recently through the merger in August 1999 of HHIC, which was involved in shipbuilding ship-repair and heavy engineering, with other parts of the Hanjin group, namely Hanjin Engineering & Construction and Hanjin Construction Co.
Shipbuilding activity represented 56% of HHIC's sales in 1999; HHIC specialises in the container vessel segment and have recently entered the LNG vessel business.
HHIC has always been profitable during the investigation period. According to the audited accounts for 1999 and June 2000, the operating income of shipbuilding and plant business segment represents respectively 22% and 11% of total sales. This division is also the most profitable one as: with a 62% share of total turnover in 1999 and 43% in June 2000, it represents 93% and 58% of the 1999 and 2000 operating income.
The following tables illustrate the profitability of HHIC, as well as the improvement of its financial structure:
|FY end in billion won
|Non operating expenses
In conclusion and as confirmed by the verification visit, there is no evidence that Hanjin Heavy Industry has not benefited from any kind of debt-rescheduling or debt forgiveness during the investigation period.
79 A debt repayment rescheduling was agreed between the new shareholders and the company's creditors for Won 400bn over a period of 20 years. The first payment was due in 1994. Following implementation of the restructuring plan, the yards came out of court receivership in September 1996.