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SEOUL, Nov 6 (Reuters) - Samsung Techwin Co Ltd (012450.KS) said on Thursday it would spin off its camera business into a separate company under the existing ownership, in a move aimed at helping the loss-making operation turn around.
Samsung Techwin’s stock briefly fell by its daily limit following the announcement, but later recovered to outperform a broader market that was sharply lower.
Analysts say the separation of camera business will help the share price of the company’s other profitable business units.
Price competition with better-known Japanese camera makers such as Sony Corp (6758.T) and Canon Inc (7751.T) and poor sales prospects amid the global downturn have weighed on Samsung Techwin’s camera business, which is also saddled with heavy reserch and marketing expenses.
Samsung Techwin, which is 25.5 percent owned by Samsung Electronics Co Ltd (005930.KS), said the new company, tentatively named Samsung Digital Imaging, will be listed on the mainboard separately as of Feb. 1, 2009.
Samsung Techwin’s capital will be divided 0.69 to 0.31 between the remaining company and the new firm.
The camera business accounted for about 37 percent of first-half revenue at Samsung Techwin, which also makes chip components, aircraft engines and gas turbines.
Samsung Techwin shares ended down 2.88 percent at 30,400 won, outperforming the wider market's .KS11 7.56 percent drop. The stock had fallen as much as 14.86 percent, extending losses of about 3 percent before the announcement, but later recovered.
In the July-September quarter, Samsung Techwin earned 32.5 billion won ($24.5 million) in net profit, down by 37 percent from a year earlier. ($1=1327.9 Won) (Reporting by Rhee So-eui; Editing by Ken Wills)