Hyundai Heavy Industries plans to raise $1.2 billion in sale of new shares
Singapore: Hyundai Heavy Industries Co., the world’s second-biggest shipbuilder, plans to raise about 1.29 trillion won ($1.2 billion) selling new shares for working capital amid shrinking orders in the global industry.
The company intends to sell 12.5 million new shares before the end of March at an estimated price of 103,000 won each, a discount of about 24% to the closing level of 136,000 won on Tuesday. The final price for the sale, which is open to both new and existing retail and institutional investors, will be determined on 5 March, Hyundai Heavy said in a regulatory filing.
The fundraising plan comes as Hyundai Heavy and other shipyards struggle with declining orders amid overcapacity and weak oil prices, forcing companies to reform and spin off some businesses. Separately, Hyundai Robotics Co., the holding company of Hyundai Heavy Industries Group that was created as part of a restructuring, on Tuesday unveiled a plan for an initial public offering for its oil-refining unit, Hyundai Oilbank Co.
“The last pieces of the puzzle in the whole revamp effort are coming together,” Hyundai Heavy Industries Group said in a separate statement Tuesday. “Hyundai Heavy’s share sale plan will help the company move forward with efforts to improve its financials. The group’s structure will also become more transparent with the IPO of Hyundai Oilbank.”
Hyundai Robotics, which owns 91.1% of Hyundai Oilbank, will select a lead manager for the sale with a goal of listing the oil refiner on the Korea Exchange in the second half of next year, the group said in its statement. Hyundai Robotics intends to use the funds raised to strengthen its finances and invest in new businesses.
Hyundai Heavy Industries, the shipbuilder, is projecting sales will fall to 13.6 trillion won in 2018 from an estimated 15.4 trillion won this year, the company said in another filing.
It plans to use the money raised from the share sale to repay debt and to invest in research and development. Hyundai Robotics, which owns 27.8% of Hyundai Heavy Industries, will buy 3.34 million of the new shares the shipbuilder plans to sell. Bloomberg