Heungwoo Industry Establishes Joint Venture with Singapore’s Kim Heng to Expand Marine Infrastructure Business [fn Market Watch]

[Financial News] South Korean marine and civil-engineering company Heungwoo Industry is joining forces with Singapore-listed marine-services company Kim Heng to establish a joint venture in South Korea. The two parties will each hold a 50% stake in Heungwoo Thaitan and jointly pursue marine infrastructure projects, including offshore and onshore Horizontal Directional Drilling (HDD). Separately, Kim Heng is moving to expand and reorganize its South Korean operations, including raising its stake in an existing Korean joint venture to 84%.
According to the Singapore Exchange (SGX) and industry sources on the 2nd, Thaitan International, 50% owned by Kim Heng, signed a joint venture agreement with Heungwoo Industry on the 24th of last month to establish Heungwoo Thaitan in South Korea.
Thaitan International and Heungwoo Industry will each own 50% of Heungwoo Thaitan. The initial paid-in capital will be KRW 200 million, with each party contributing KRW 100 million.
The two sides will also share management responsibilities. Heungwoo Industry will appoint the chief executive officer (CEO), while Thaitan International will appoint the chief operating officer (COO) and chief financial officer (CFO).
The newly established joint venture will pursue projects in South Korea involving Horizontal Directional Drilling (HDD) on land and offshore, as well as pipe jacking and direct pipe.
HDD is a construction method that creates underground passages for pipes or cables without extensive excavation of the surface. It is used to connect subsea cables from offshore wind farms to land and to build marine and energy infrastructure.
The joint venture is intended to combine Heungwoo Industry’s domestic business base with Kim Heng’s marine-engineering capabilities. Heungwoo Industry is a South Korean construction and engineering company engaged in civil engineering and marine construction. Kim Heng is a marine-services company listed on the Singapore Exchange. It is expanding into renewable-energy businesses, including offshore wind, in addition to ship and marine engineering.
Kim Heng is expanding and reorganizing its South Korean operations by establishing a new joint venture with Heungwoo Industry while strengthening its control over an existing Korean joint venture. On the 1st, Kim Heng’s wholly owned subsidiary Adira Renewables signed an agreement to acquire an additional 35% stake in Soil Tech Adira Korea (SAK), a Korean joint venture, from Soil Tech Engineering for USD 420,000, or approximately KRW 580 million.
Once the transaction is completed, Adira Renewables’ stake in SAK will rise from 49% to 84%. As a result, SAK is expected to become a consolidated subsidiary of the Kim Heng Group. SAK’s existing ownership structure consists of Adira Renewables with 49%, Soil Tech Engineering with 35%, and Moon International with 16%.
The acquisition appears to be aimed less at making an additional investment than at reorganizing the existing joint-venture relationship. According to a disclosure by Kim Heng, the two sides had differences of opinion over vessel performance and related issues during project execution, schedule delays, vessel standby costs, cost-sharing arrangements for the joint venture, and the future direction of the business. Following discussions, they agreed that Soil Tech Engineering would transfer its 35% stake in SAK to Kim Heng. Once the transaction is completed, Kim Heng will gain control of SAK and incorporate it as a consolidated subsidiary.

[email protected] Hyun-jung Kim Reporter