South Korean conglomerate Hyosung Group’s plan to demerge its businesses into a holding and four operating entities is expected to pick up speed after the local stock exchange operator Korea Exchange on Monday approved Hyosung’s spinoff plan during its preliminary review.

The nation’s 25th largest chaebol, or family-owned conglomerate, by asset has been pursuing to split its businesses into a holding firm Hyosung Corporation and four operating units including Hyosung T&C (textile and trading), Hyosung Heavy Industries (shipbuilding and construction), Hyosung Advanced Materials (industrial materials) and Hyosung Chemical. They are tentatively named. After the demerge, the group aims to relist them in the main Kospi market in summer.

In the first six months of 2017, Hyosung T&C raked in 89.6 billion won ($84 million) in net profit and 1.6 trillion won in sales, according to the company. Hyosung Heavy Industries recorded 86.8 billion won in net profit and 1.4 trillion won in sales, Hyosung Advanced Materials 93.3 billion won in net profit and 516 billion won in sales and Hyosung Chemical 35.3 billion won in net profit and 804 billion won in sales over the same period.

Hyosung Group has so far managed its broad range of businesses under a single company since it merged its four businesses including Hyosung T&C, Hyosung Trading Company, Hyosung Living Industry and Hyosung Heavy Industries in 1998 in the aftermath of the Asian financial crisis. The group expects the upcoming demerger would enhance transparency in its governance and raise shareholders’ value.

The spinoff is expected to be completed by June 1 after a shareholders’ meeting to be held to vote on the matter on April 27. The group aims to list shares of the new entities on the Kospi on July 13.

By Hwang Min-soon and Choi Mira

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