Company - - Dec 26,2017
South Korea's Hyundai Heavy Industries Group, plans to raise about 1.29 trillion won by selling new shares for working capital amid decreasing 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 percent to the closing level of 136,000 won Tuesday. Hyundai As reported, the sum raised will be used to improve its financial erection and for research & development. The final price for the sale, which is open to both new and existing retail and institutional investors, will be determined on March 5, Hyundai Heavy Company said in a regulatory filing.
Low oil prices and complex designs have made high-end offshore floating production facilities for oil and gas loss-making for the world’s three biggest shipbuilding groups, all South Korean, as demand shrinks and some orders are slashed. In a move to bolster its finances, this investment will work on its capital. In another filing, the company said that Hyundai Heavy Group is predicting sales will fall to 13.6 trillion won in 2018 from an estimated 15.4 trillion won in 2017.
Distinctly, Hyundai Robotics Co., which is holding company of Hyundai Heavy Industries Group (HHI) 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. A Hyundai Heavy spokesman recently said that the rights issue is part of the shipbuilder's previously announced plan to improve financial soundness. He further adds, “The group’s structure will also become more transparent with the IPO of Hyundai Oilbank”. Hyundai Oilbank, South Korea's smallest refiner by capacity, is 91.1 percent owned by Hyundai Robotics.
Also, Hyundai Robotics, which currently owns 27.8 percent of Hyundai Heavy Industries, will purchase 3.34 million of the new shares the shipbuilder plans to sell.