Doosan Bobcat may brave anemic IPO market

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Doosan Bobcat may brave anemic IPO market

Doosan Bobcat’s owners are planning what could be Korea’s biggest initial public offering in more than six years as the manufacturer of excavators and loaders looks to raise as much as 2.45 trillion won ($2.2 billion) in a share sale next month.

Shareholders of the company, an arm of Korea’s biggest construction equipment maker, will offer about 49 million existing shares at 41,000 won to 50,000 won apiece, according to a regulatory filing Thursday. Doosan Bobcat will gauge demand for the share sale from Oct. 6 to Oct. 7 and plans to take investor orders from Oct. 12 to Oct. 13.

Doosan Bobcat joins Samsung Biologics in braving an IPO market that’s had the second-worst performance among major Asian bourses. The Seoul-based company, which got about 70 percent of its sales of 4.04 trillion won last year from North America, has been seeking to expand in emerging markets, including China and Southeast Asia, to generate more growth opportunities.

“Our priorities are on reinforcing competitiveness in emerging markets, providing locally-customized products, and investing in distribution channels and a sales service network,” Doosan Bobcat said in a statement. “We have built a stable business foundation owing to steady housing market growth in North America and the expansion of high-end product sales.”

The company plans to announce the final price on Oct. 10 and begin trading Oct. 21, according to the filing. Doosan Infracore will sell 23.2 million Doosan Bobcat shares in the offering.

The offering will add to the $1.7 billion raised from first-time share sales in Korea this year, down from $1.9 billion during the same period in 2015, data compiled by Bloomberg show.

Doosan Infracore bought Ingersoll-Rand’s Bobcat business and other equipment units in 2007 for $4.9 billion, the biggest overseas deal by a Korean company. Doosan Bobcat posted 234.8 billion won in operating profit in the first half of this year and generated sales of 2.15 trillion won, the company said. Its operating margins widened to 10.92 percent in the first half, from 9.54 percent for 2015.

The company is pursuing a listing after Korean policy makers revised IPO rules late last year. The regulator eased documentation requirements for Korean companies with businesses abroad, making it easier for firms like Doosan Bobcat that have many overseas units. Bloomberg
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