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IPOs

Hyundai Heavy gets approval for IPO

Shipbuilding sector recovery to help raise more funds than its initial plan

By Aug 06, 2021 (Gmt+09:00)

Hyundai Heavy Industries' shipyard
Hyundai Heavy Industries' shipyard

Hyundai Heavy Industries Co. got approval for an initial public offering (IPO) from South Korea’s stock exchange. The country’s top shipbuilder is expected to be listed as early as September.

The Korea Exchange on Aug. 5 approved Hyundai Heavy’s listing plan. The company is set to file a registration statement to the Financial Supervisory Service soon and take necessary steps including bookbuilding for institutional investors and public subscription for retail investors. It is likely to conclude those processes next month.

Hyundai Heavy was spilt off in 2019 from Korea Shipbuilding & Offshore Engineering (KSOE), which is the intermediate holding company of the Hyundai Heavy Industries Group.

Hyundai Heavy’s corporate value is predicted to increase as its parent KOSE’s shares have risen nearly 20% so far this year on hopes for an improvement in the shipbuilding industry. The investment banking industry estimates Hyundai Heavy’s value at more than 6 trillion won ($5.3 billion), expecting the company to raise more than 1 trillion won, its target announced in January, through the IPO.

The shipyard reported 32.5 billion won in operating profit with a revenue of 8.3 trillion won last year. The earnings are likely to increase on massive orders this year, although the company will shoulder the extra costs from rising raw material prices.

Write to Jin-Seong Kim at jsk1028@hankyung.com

Jongwoo Cheon edited this article.

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