South Korean shipbuilding company Hyundai Heavy Industries (HHI) revealed plans to raise KRW 1.3 trillion (USD 1.21 billion) via a share issue to improve its financial structure.
Specifically, Hyundai Robotics, the company’s holding company, is to apply for an initial public offering (IPO) for its subsidiary Hyundai Oilbank, HHI said in a stock exchange filing.
Hyundai Oilbank is expected to be listed on the stock exchange in the second part of 2018.
The company intends to sell a total of 12.5 million shares by March 2018. As informed, HHI will use KRW 869 billion from the share sale for operating funds.
The purpose of the share issue is to boost HHI’s financial status and invest in research and development.
Once the share issue is completed, Hyundai Heavy Industries, Hyundai Samho Heavy and Hyundai Mipo Dockyard would be able to repay loans and hold KRW 500 billion in net cash, Yonhap News Agency reported.
HHI has been posting losses due to a slump in the shipbuilding industry which forced the company to pursue various cost-cutting measures such as implementing a paid leave scheme and shutting down operations at some of its facilities.
The recent moves are to prepare HHI for an anticipated recovery in the shipbuilding industry. In its forecast for 2018, HHI expects to win orders worth KRW 16.6 trillion, compared to KRW 11.4 trillion secured in 2017.
World Maritime News Staff