Published : Aug. 17, 2016 - 15:14
Amid growing speculation of a possible merger between Samsung’s two engineering units in light of a voluntary restructuring law that took effect last week, a Samsung executive denied the market expectation saying that talk of such a move was premature.
“We are not going to push ahead with the merger plan for now,” said
Samsung Heavy Industries CEO Park Dae-young as he left the tech giant’s head office in Seocho, southern Seoul, after attending a weekly meeting with other CEOs of Samsung affiliates.
“Not only Samsung Engineering but also Samsung Heavy Industries should seek (ways to) stand on their own feet first,” he said.
Park, however, left room for speculation over the merger between the two. He indicated that technology developed by Samsung Engineering, the conglomerate’s factory and plant constructing arm, would be useful for Samsung Heavy’s operations.
“Samsung Heavy might require Samsung Engineering’s technology,” he said. “But we have to wait and see if (such a partnership) will be subject to the ‘one-shot act’ and whether we should request a merger for that.”
The comment came amid growing market speculation that the stalled merger talks between the two companies would be reinvigorated by the implementation of so-called “one-shot act.”
The Special Act on the Corporation Revitalization, known as the “one-shot act” came into effect on Saturday. It exempts companies that pursue intra-group mergers and corporate restructuring spin-offs from strict antitrust laws and financial market regulations. Companies taking self-rescue plans will be given tax benefits and subsidies for research and development.
The two Samsung units had sought for a merger in September 2014, but the plan was scuttled in the face of fierce oppositions from shareholders.
Meanwhile, the ailing Samsung Heavy Industries has been seeking to raise its capital as part of its self-rescue plan. The shipbuilding unit of the nation’s largest conglomerate Samsung Group has been suffering from falling freight rates and orders amid falling market demand and intensifying competition.
“We are pursuing a paid-in capital increase and have asked affiliates that hold shares of (Samsung Heavy) to support (the plan),” said Park. “As reported in the media, about 1 trillion won in capital increase will be enough.”
By Cho Chung-un (christory@heraldcorp.com)