Doosan Bobcat sets share price

Doosan Bobcat’s initial public offering is set to become Korea’s second biggest this year, raising 900.8 billion won ($789.86 million) from 30 million shares, the construction equipment manufacturer said in a regulatory filing Monday.

The company will be offering six million of its shares at 30,000 won apiece to retail investors today and tomorrow, about 20 percent of the company’s 30 million shares which include those owned by majority stakeholder Doosan Infracore and Doosan Engine.

The six million shares are expected to help the company raise 210 billion won from retail investors.

The initial public offering is set to become the second largest on the local market this year after Samsung Biologics. Doosan Bobcat is expected to go public next Monday.

The company previously made an attempt to list last month but decided to postpone it after the book-building showed demand for shares failed to reach expectations.

Initially, Doosan Bobcat was hoping to sell 49 million shares at a price range of 41,000 to 50,000 won apiece, which would have helped raise 2.45 trillion won, but investors balked at the high price and argued there were too many shares being sold.

The updated book-building conducted last week had participation from 406 institutional investors and showed higher demand for the construction equipment company’s shares. There was competition of 9.81 to 1 on 60 percent of the shares offered.

The performance of Doosan Bobcat’s initial public offering is especially significant for Doosan Group. The debt balance for Doosan Bobcat as of June was around 2.3 trillion won, 67.6 percent of which comprises short-term debt with a maturity of one year or less. Doosan Bobcat has been selling off its assets to secure liquidity.

“The initial public offering of Doosan Bobcat is in its final stage, and we are expecting huge interest in the shares,” said an official at Korea Investment and Securities, one of the financial companies managing the sales.

Doosan Bobcat holds a dominant position in the U.S. and European markets for small construction equipment. In the first half of this year, the company earned 2.15 trillion won in revenue and made an operating profit of 234.8 billion won.

Last year, it made 4 trillion won from North America alone. The construction company has plans to expand to emerging markets including China and Latin America.

After the regulatory filing, shares of majority stakeholder Doosan Infracore went up 2.53 percent to close at 7,300 won on Monday.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]