Hanwha Chemical Corp., Unid Co. and Tong Yang Moolsan Co. have become the first beneficiaries of the so-called One-Shot Act, a newly-enacted law designed to facilitate and encourage voluntary corporate restructuring, the Ministry of Trade, Industry and Energy announced Thursday.

The three companies will be given a wide ranging government support including fast-track procedures of mergers and acquisitions, tax benefits and research and development aid, according to the Corporate Vitality Enhancement Act. Dubbed as the One-Shot Act, the new law aims to help companies carry out business restructuring on their own through simplified procedures, exemptions from regulations and comprehensive government incentives. The law went effect from August 13 and it took only three weeks for the companies to get the benefits of the law.

Hanwha Chemical suggested in its application that it will sell a chlorine and caustic soda factory in Ulsan, South Gyeongsang Province to Unid, which will then renovate the plant to produce caustic potash, a move that is expected to cut production of caustic soda that has been suffering from oversupply.

The proceeds from the sale and tax benefits are expected to improve Hanwha Chemical’s bottom line and help it shift its focus to more promising industries such as high performance polyvinyl chloride (PVC). The deal is also expected to help Unid cement its number one position in the global caustic potash manufacturing industry with the cut in investment cost and expanded production capacity.

Tong Yang Moolsan, an agricultural machinery maker, will acquire stakes in its local rival Kukje Machinery Co. and the deal is expected to rearrange business structure by streamlining overlapping businesses and cutting machinery production by 15 percent.

Kukje Machinery was put up for sale by its parent company Dongkuk Steel Mill Co. that is also under restructuring to improve its financial health. The sale is expected to help the steel industry, also suffering from overcapacity, to reinforce its fundamentals.

By Seo Dong-chul

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