Hyundai Engineering and Construction Stop Inter-Korean Business

Hyundai Engineering and Construction (HDEC) is to be completely separated from the Hyundai Group in July. The current company’s name and logo, and the foundational spirit of the company will be maintained, but it will discontinue the support to the inter-Korean business.

The company will establish a task force to mold the long-term operation plan of the company, and it will finish the arrangement of management system by appointing a new Chief Financial Officer (CFO) by the end of this month.

Shim Hyun-Young, the HDEC`s new president, declared his management plan in a press conference after his inauguration ceremony in the Hyundai head building yesterday.

President Shim told that ``HDEC was virtually separated from the Hyundai Group by the resolution in a special shareholders meeting last Friday, and only the logistical procedures are left. The cooperative relationship will be maintained in a technical and operational level, but there would be no capital transactions with Hyundai Group affiliates.``

An official of Hyundai explained that ``we will apply the separation from the affiliates to the Fair Trade Commission by the beginning of July.``

President Shim stressed that HDEC will divorce itself from the inter-Korean business that have been pursued along with Hyundai-Asan Foundation, etc., because it was separated from the Hyundai Group affiliates. But he added that the name of `HDEC`, logo and the foundational spirit of the late former Chairman Jung Ju-Young will be preserved.

Regarding the early normalizing plan of the company, he revealed that he will raise the productivity per worker up to the advanced-country companies` level, fulfilling the self-rescue plan as planned. And he added that ``the company will receive orders on a profit basis, and will keep trying to `work out` the company through the introduction of the sabbatical year, the break-up management and the self-supporting system, etc..``

And Shim showed his confidence about the normalization of management, saying ``it is for sure to receive, with the US`s `AES` corporation, an order of a power plan construction ($0.38 billion) that Qatar placed. And the construction orders of $ 0.5 billion which had been delayed due to the failure of issue of construction guarantee will resume sooner or later.``

Regarding the plan to secure small shareholders` profit, President Shim told that even though he could not promise the concrete amount of stock price, he would make every effort to manage the stock price by inducing creditors not to sell their shares in the stock market.

Hwang Jae-Seong jsonhng@donga.com