Hyundai Rotem eyes IPO to expand overseas

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Hyundai Rotem eyes IPO to expand overseas

Hyundai Rotem, a unit of Hyundai Motor, plans to raise as much as 622.4 billion won ($575 million) in an initial public offering to finance overseas expansion, the nation’s biggest IPO in three years.

The shares will probably be sold at 17,000 won to 23,000 won each, the nation’s biggest railcar maker said in a regulatory filing Monday.

The shares are scheduled for pricing around Oct. 17 and for a trading debut around Oct. 30, according to a term sheet obtained by Bloomberg.

The sale will help Hyundai Rotem “become a global player” in the railcar and machinery industries, the company said.

Selling at the top end of the price range would result in Korea’s largest IPO since Samsung Life Insurance’s 4.89 trillion-won deal in 2010, according to data compiled by Bloomberg.

Daewoo Securities, Woori Investment and Securities, Bank of America Merrill Lynch and Deutsche Bank AG are arranging the sale, Seoul-based Hyundai Rotem said.

The company, founded in 1977, also makes armored vehicles such as tanks, along with plants, presses and steel-making facilities, according to its Web site.

Hyundai Motor, Korea’s largest automaker, owns 58 percent of Rotem’s shares, according to a regulatory filing in April.

A private equity fund affiliate of Morgan Stanley owns the remaining shares, the filing shows.

Hyundai Motor remained nearly unchanged at 256,500 won. The company’s stock climbed 2.8 percent on Monday before the IPO announcement was made.

The IPO market has been drying up in recent years because companies are cautious of going public as many have been struggling due to the stagnant economy. According to the Korea Exchange, only two were listed on the main bourse.


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