Hyundai Heavy to Raise $1.2B Via Rights Offering
South Korea's Hyundai Heavy Industries (HHI) plans to raise about 1.29 trillion won ($1.2 billion) in an initial public offering (IPO) and list its refining subsidiary Hyundai Oilbank.
The report quoted the world’s second-biggest shipbuilder stating that Hyundai Robotics, the group’s holding company, has decided to list refining subsidiary Hyundai Oilbank in an IPO in the second half of 2018.
The group also plans to issue 12.5 million rights shares, worth about 1.3 trillion won ($1.21 billion), by March.
The two moves are part of the conglomerate’s efforts to improve affiliates’ financial soundness after switching to a holding company structure earlier this year, it said.
Hyundai Oilbank, South Korea’s smallest refiner by capacity, is 91.1 percent owned by Hyundai Robotics.
“Starting with Hyundai Oilbank’s initial public offering, we will continue to strengthen the transparency of our ownership structure,” a Hyundai Heavy Industries Group official said, according to a statement by the shipbuilder.
HHI, the world’s second-largest shipbuilder by order book, said the rights issue is expected to be completed by March 2018 and the sum raised will be used to improve its financial structure and for research & development.
HHI is projecting sales will fall to 13.6 trillion won in 2018 from an estimated 15.4 trillion won this year, said company sources. Shipbuilders in South Korea have been under financial strain for years due to persistent overcapacity since the 2008 global financial crisis.
