"Contrary to what was reported, our company is not seeking to sell its stake in Hyundai Rotem," Hyundai Motor's finance management head Park Hae-sung said in a regulatory filing on April 21. Hyundai Motor is the largest shareholder with a 33.8 percent stake in Hyundai Rotem.
Hyundai Rotem also published a similar post denying any stake sale, after its labor union issued a statement urging the auto group to take action against groundless rumors. "Hyundai Rotem, the only company in South Korea that produces both railway vehicles and defense products, is a key national industry that can never be sold," the union said, insisting a stake sale should be approved by all employees.
Hyundai Rotem's business is divided into three key sections -- railway, defense and plants. Mainly due to heated competition abroad, the railway section has been in the red, posting an operating loss of 41.7 billion won ($37 million) in 2018, 259.5 billion won in 2019 and 11.6 billion in 2020. New orders have decreased from 3.8 trillion won in 2017 to 2.8 trillion won in 2020.
At a meeting of shareholders in March, Hyundai Rotem CEO Lee Yong-base promised to focus on new growth engines such as hydrogen, robots and self-driving. "We will establish a foundation for future growth by expanding investments in core and future businesses," Lee said. Hyundai Rotem is involved in the development of locomotives based on liquefied hydrogen and hydrogen trams.
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