No plans to merge engineering unit: Samsung

Samsung Heavy Industries (SHI) said Friday that the country’s leading shipbuilder has no plans to merge with Samsung Engineering.

“Currently, SHI has no plans to merge with Samsung Engineering,” SHI CEO Park Dae-young told reporters on the sidelines of the company’s shareholders’ meeting in southern Seoul.

The remarks are a major reversal a few months after the CEO’s remarks last September that the two firms should eventually merge.

SHI’s 2014 takeover attempt of Samsung Engineering had failed due to shareholder opposition.

But the scenario for the merged entity is still a top issue in the domestic shipbuilding industry, as Samsung Group is accelerating its efforts to transform its corporate structure focusing on consumer electronics, finance and biotech by unloading unprofitable businesses and merging key group units.

SHI CEO Park was reinstated, securing his CEO post for another three years after last year’s management overhaul. SHI reported historically high operating losses in 2015.

The CEO, however, remained positive that the group’s shipbuilding affiliate will turn a profit this year.

“The situation is desperate. If ship orders pay for the return of ships, which were being built in SHI’s shipyard in Korea, then I am very much confident that SHI will return to the black,” said Park.

Despite the continued liquidity problems, SHI said it has no plans to raise additional capital by selling new shares.

“The number of company executives was halved in the last two years,” Park said. “SHI is on track to improve financial soundness by cutting costs and selling none-core assets A huge number of company executives took responsibility for the disastrous corporate performance.”

SHI hired former Samsung Electronics global technology center chief Kim Jong-ho, in what officials say is a move to overhaul the shipbuilder’s key manufacturing process.
Source: Korea Times