South Korean shipbuilder Hyundai Heavy Industries (HHI) has decided to raise capital amounting up to KRW 1.08 trillion (about $932.8 million) in an effort to fund the development of eco-friendly vessel technologies.
As a fundraising method, HHI, part of Korea Shipbuilding & Offshore Engineering Co. (KSOE), would use an initial public offering (IPO).
HHI has submitted the application to South Korean government’s top financial regulator, the Financial Services Commission (FSC), according to Yonhap News Agency.
As disclosed, the shipbuilder plans to offer 18 million new shares at a price ranging from KRW 52,000 to KRW 60,000 each.
The shares will be sold on the local stock market in early September 2021, the shipbuilder said in a stock exchange filing.
HHI intends to allocate the fresh capital for the development of environmentally friendly and autonomous vessels as well as offshore hydrogen production plants. Around KRW 47 billion of the total amount will also be used for debt repayment, HHI said.
The recent move is in line with South Korea’s ambitious initiative promoting eco-friendly ship technologies. Unveiled in December 2020, the 2030 Green Ship-K Initiative aims to align policies with the country’s Green New Deal and establish a brand image of a Korean eco-friendly ship.
Earlier this year, the shipbuilder also signed a memorandum of understanding with the Korean Register (KR) to collaborate on the joint development of non-carbon fueled vessels such as ammonia and hydrogen. Under the MOU, the duo committed to exchanging technical information and human resources to drive progress on the decarbonization of the shipping industry and the forthcoming IMO regulations.
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In the first half of this year, HHI secured orders for 50 newbuilds worth $7.25 billion.