Doosan aims to raise $1.3 bn in rights offering

Doosan Heavy Industries & Construction Co., South Korean conglomerate Doosan Group’s subsidiary, agreed to raise 1.5 trillion won ($1.3 billion) via a rights offering at its board meeting held on Nov. 26. 

The heavy industrial company plans to use 800 billion won of the 1.5 trillion won to strengthen its eco-friendly businesses, such as hydrogen turbines, offshore wind power and small module reactors (SMRs), a type of nuclear reactor, and use the remaining 700 billion won for existing debt redemption. 

The company will first issue new shares to its existing shareholders then open to public subscriptions. A total of six Korean securities firms including NH Investment & Securities Co., Korea Investment & Securities Co. and Mirae Asset Securities Co. will be bookrunners and acquire all forfeited shares, if any. 

The construction company will invest 300 billion won in hydrogen turbines and 200 billion won in offshore wind power, as well as boost investment in SMRs, fuel cells, hydrogen power and solar energy. It also plans to accelerate new businesses such as 3D printing and resource recirculation. 

The rights offering will secure funds for Doosan’s eco-friendly energy businesses as well as improve the company’s financial structure, which will lead to its sustainable growth, an official from Doosan Heavy Industries said.

Meanwhile, the company’s parent group is accelerating its financial restructuring as part of a self-rescue program. On Nov. 12, Doosan Group inked an agreement to sell a 54% stake in Doosan Engineering & Construction Co. (Doosan E&C) to a consortium of Korean financial investors for 138 billion won. Under the agreement, Doosan Heavy Industries is disposing of the majority of Doosan E&C’s stakes while holding the other 46% stake. The consortium consists of Seoul-based Q Capital Partners, SkyLake Equity Partners, Woori Private Equity, Eugene Asset Management Co. and Shinyoung Securities' private equity division.

In February of this year, Doosan Heavy Industries signed a deal to sell a 34.97% stake in construction equipment maker Doosan Infracore to Korean shipbuilder giant Hyundai Heavy Industries Holdings Co. for 850 billion won and completed the sale in August. 

Write to Jun-ho Cha at chacha@hankyung.com
Jihyun Kim edited this article.