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Hyundai Heavy Industries, the flagship company of South Korea's
ninth-largest conglomerate, said on Tuesday that Hyundai
Robotics <267250.KS>, the group's holding company, has decided
to list refining subsidiary Hyundai Oilbank [INPTVH.UL] in an
initial public offering (IPO) in the second half of 2018.
The shipbuilder also said it will issue rights shares worth
about 1.3 trillion won ($1.21 billion). 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.
Hyundai Heavy Industries, 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.
The IPO and the rights issue will prepare the group for a
shipbuilding industry recovery expected to start in 2019, it
said.
A Hyundai Heavy spokesman said the rights issue is part of the
shipbuilder's previously announced plan to improve financial
soundness. That plan began in 2015 when major South Korean
shipbuilders reported losses as low oil prices drove an industry
downturn, and cost overruns and delays in the construction of
complex offshore facilities weighed.
(Reporting by Joyce Lee; Additional reporting by Jane Chung;
Editing by Sam Holmes and Muralikumar Anantharaman)
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