Doosan Heavy plans to issue $1.1B in new stock
Doosan Heavy Industries & Construction said Friday it will issue 1.3 trillion won ($1.1 billion) in new stock to improve its financial structure.
The cash-strapped power plant builder reported Friday it will issue a total of 121,495,330 shares of common stock for around 10,700 won each.
The final stock price will be set on Nov. 30.
The new shares will be listed on the Korea Exchange on Dec. 24.
Doosan Corporation, which owns 44.86 percent of Doosan Heavy, will sell its shares in Doosan Solus, an electronics parts supplier, to buy Doosan Heavy’s new shares.
Doosan Corporation reported on Friday it is selling its 18.05 percent stake in Doosan Solus to SkyLake Investment, a local private equity firm founded in 2006, for 238.2 billion won. Other major shareholders of Doosan Solus, including Doosan Group Chairman Park Jeong-won, are selling 34.88 percent of its shares to SkyLake for 460.4 billion won.
Doosan Corporation is also spinning off Mottrol, which makes hydraulic components, and hopes to sell the division to a consortium of investment companies for 453 billion won.
Doosan Corporation sold its 96.77 percent stake in investment company Neoplux to Shinhan Group for 73 billion won in August. It is also trying to sell Doosan Tower in central Seoul to reduce debt.
Doosan group received a 3.6 trillion won bailout from state-run banks this year. Doosan Heavy plans to repay 1 trillion won within this year.
“Through these efforts, Doosan Corporation has secured the finances necessary to take part in Doosan Heavy’s issuance of new stock,” said Doosan Corporation in a statement.
On the same day, Doosan Corporation voted at a board meeting to transfer a 23 percent stake in Doosan Fuel Cell owned by the chairman and his family to Doosan Heavy for free. The shares were worth 574 billion won as of the close of trading on Friday.
Following the transfer, Doosan Heavy will become the largest shareholder in Doosan Fuel Cell.
Doosan hopes Doosan Heavy and Doosan Fuel Cell will lead to synergy in eco-friendly businesses.
Doosan Fuel Cell makes hydrogen fuel cells while Doosan Heavy plans to beef up its offshore wind power business.
Doosan Fuel Cell also reported it would issue 342 billion won worth of new stock on Friday.
A total of 10 million shares will be issued at 34,200 won per share. They will be listed on Korea Exchange on Dec. 29.
Doosan Heavy’s market capitalization is 4.13 trillion won, while that of Doosan Fuel Cell is 2.53 trillion won.
Doosan Heavy’s shares closed at 16,300 won on Friday, unchanged from the previous day.
Doosan Fuel Cell shares closed 1.44 percent up from the previous day at 45,650 won.
BY JIN MIN-JI [firstname.lastname@example.org]
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