HHI shares fall from canceled plant project

Hyundai Heavy Industries’ stock price started off weak Thursday, a day after it announced its marine plant project worth 2.1 trillion won ($1.78 billion) was canceled, having been pending for more than three years.

The stock price opened at 150,500 won on the Seoul bourse on Thursday, down 1.95 percent from the previous session, and continued to drop in the afternoon. 

The shipbuilder said Chevron North Sea had notified that it would withdraw the order to build a floating production storage offloading unit, citing worsening global business conditions.

There are no losses for the Korean company as no process has been made so far, the company had said in a regulatory filing.

HHI has been waiting for Chevron North Sea’s final decision for the project. The Korean shipbuilder obtained the contract in April 2013, before the US Oil company made the final investment decision.

The offshore facility was to be built in a sea oilfield, 175 kilometers northwest of Shetland, Scotland, by next year. The US company, however, has delayed the final decision due to the low price of oil.

With the project canceled, the shipbuilder’s backlogs of orders dropped from $12 billion to $10 billion.

By Lee Hyun-jeong (rene@heraldcorp.com)