Doosan begins pre-IPO funding round for US fuel cell unit HyAxiom

Doosan Corp., the holding company of South Korean plant-to-machinery conglomerate Doosan Group, is slated to attract $200 million for its hydrogen fuel cell maker HyAxiom Inc. as a part of pre-initial public offering funding to expand the subsidiary’s production capacity. 

The holding firm is in talks with potential investors such as KDB Investment Co., Korea Investment Private Equity Co., KB Asset Management Co. and Shinyoung Securities Co., sources familiar with the matter said on Thursday. Doosan, which wholly owns HyAxiom, will tap two firms as financial investors (FIs), and each of them will acquire about a 15% stake in the fuel cell maker. 

Doosan will offer a put option to the investors that they will be reimbursed on their principal plus 5% HyAxiom’s internal rate of return (IRR) in case the Conneticut-based subsidiary fails to go public within five years.   

HyAxiom is aiming to receive a total of $350 million via the pre-IPO funding round, including investments from US strategic investors (SIs), in a bid to list on the US public market. If it successfully attracts funds, the company’s value will jump to about $1.4 billion from the current $1 billion.

Doosan established HyAxiom as it acquired US fuel cell maker ClearEdge Power Inc. for $32.4 million in 2014. HyAxiom’s business is highly associated with group affiliate Doosan Fuel Cell Co. – most of its revenue comes from the Doosan affiliate’s orders; Doosan Fuel Cell Chief Executive Jeong Hyung-rak is also the CEO of HyAxiom.

The Connecticut-based energy firm is struggling to make profits. It posted a net loss of 115.5 billion won last year, nearly 6.4 times the loss in 2021.

Doosan is set to execute corporate restructuring via listings of Doosan Robotics Inc. and HyAxiom, the two affiliates of the group’s future growth. The holding firm, which owns a 90.91% stake in Doosan Robotics, is aiming for the robot unit’s IPO on the main bourse Kospi later this year. It is also operating a team at HyAxiom’s headquarters in Connecticut to prepare for the US listing.

Write to Ji-Eun Ha at hazzys@hankyung.com

Jihyun Kim edited this article.