Monday, August 11th, 2014
SEOUL, KOREA - Daeryun Power and Daeryun Energy, the two energy suppliers under the umbrella of Hanjin Heavy Industries Group, will merge with each other by the end of September. This is interpreted as a group-wide move to restructure the governance structure of its energy affiliates centering around Daeryun E&S.
Earlier on July 1, Hanjin Heavy Industries sold 1,082,700 shares (worth 6.1 billion won) of Daeryun Energy to Daeryun E&S. Daeryun E&S will in turn buy an additional 23-percent stake in Daeryun Power after the merger to give it the same stake as Hanjin Heavy Industries'. According to fair trading laws, each subsidiary must hold the same stake if a multiple number of subsidiaries is to hold shares in a granddaughter company.
Industry analysts see this transaction as a preliminary move by the Hanjin Heavy Industries Group to make Daeryun E&S a mid-level holding company controlling the energy-related affiliates within the group. Once Daeryun E&S makes an IPO, Hanjin will buy up shares of the company after another merger with Byulnae Energy and thereby cementing its control over the whole energy-related affiliates.
