Hyundai Heavy Industries Group to record Oilbank, challenge $1.2 billion rights shares

SEOUL (P3P) – South Korea’s Hyundai Heavy Industries Group plans to record its refining arm Hyundai Oilbank in an IPO in 2018 and lift about $1.2 billion through a share challenge by shipbuilder Hyundai Heavy Industries (009540.KS), in a transfer to bolster its funds.

Hyundai Heavy Industries, the flagship firm of South Korea’s ninth-largest conglomerate, stated on Tuesday that Hyundai Robotics (267250.KS), the group’s holding firm, has determined to record refining subsidiary Hyundai Oilbank [INPTVH.UL] in an preliminary public providing (IPO) within the second half of 2018.

The shipbuilder additionally stated it would challenge rights shares value about 1.three trillion gained ($1.21 billion). The 2 strikes are a part of the conglomerate’s efforts to enhance associates’ monetary soundness after switching to a holding firm construction earlier this yr, it stated.

Hyundai Oilbank, South Korea’s smallest refiner by capability, is 91.1 p.c owned by Hyundai Robotics.

“Beginning with Hyundai Oilbank’s preliminary public providing, we are going to proceed to strengthen the transparency of our possession construction,” a Hyundai Heavy Industries Group official stated, in accordance with an announcement by the shipbuilder.

Hyundai Heavy Industries, the world’s second-largest shipbuilder by order ebook, stated the rights challenge is anticipated to be accomplished by March 2018 and the sum raised shall be used to enhance its monetary construction and for analysis & growth.

The IPO and the rights challenge will put together the group for a shipbuilding trade restoration anticipated to start out in 2019, it stated.

A Hyundai Heavy spokesman stated the rights challenge is a part of the shipbuilder’s beforehand introduced plan to enhance monetary soundness. That plan started in 2015 when main South Korean shipbuilders reported losses as low oil costs drove an trade downturn, and price overruns and delays within the building of complicated offshore amenities weighed.