South Korea’s Hanjin Heavy Industries & Construction Co. is speeding up the sale of its subsidiary Hacor Inc. as part of its massive debt restructuring efforts.

According to the investment banking industry on Sunday, Hanjin Heavy Industries and its sale advisor NH Investment & Securities Co. are expected to issue investment guidance this week to invite potential buyers to take part in the auction for its 100 percent stake in Hacor, worth 33.4 billion won ($29.6 million) based on book value.

Hanjin Heavy aims to embark on preliminary non-binding auction for Hacor in mid-September in hopes to find a preferred bidder by October. If everything goes as planned, the sale is expected to be completed within the year.

Based in Los Angeles, Harco is an in-flight catering service that accounts for 30 percent of all airline meals supplied to LA International Airport. Last year it posted a net profit of 2.9 billion won on sales of 80.1 billion won.

The sale is part of the debt-stricken shipbuilder’s efforts to shore up its finances. The company, hit hard by a severe downturn in the global shipbuilding industry for the last few years, entered into a creditor-led debt rescheduling program in January 2016 and has been sustaining operation on creditors’ relief.

The company is also in the process of selling another asset. Its financial advisor NH Investment & Securities is currently overseeing the sale of another Hanjin subsidiary, Korea Engineering Consultants Corp. A preferred bidder should be selected in the coming months.

With the sale of the two subsidiaries, Hanjin Heavy Industries is expected to attain over 100 billion won in cash. The company has already secured 460 billion won through the disposal of its North Port site in Incheon and Dadaepo plant in Busan. It plans to sell off additional assets to achieve its debt restructuring target.

“Hanjin Heavy Industries will likely report strong net figures in the third and fourth quarters mainly due to asset sales,” said Yang Hyeong-mo, an analyst at eBest Investment & Securities Co. “The company faces no immediate risks in the second half and all negative factors have already been factored in.”

Shares of Hanjin Heavy Industries closed Monday up 2.48 percent at 4,540 won.

By Chun Gyung-woon and Yoo Tae-yang

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