Hyundai Heavy Industries Set to Raise $930 Million in IPO
Hyundai Heavy Industries announced Monday that it is set to raise more than $930 million in a heavily-oversubscribed initial public offering.
The firm's book-building period ended on Friday, and institutional investors expressed interest in buying more than 1,800 times as many shares as HHI plans to make available. That ratio is just shy of the national record set by South Korean materials and refining company SK IET, which debuted in an IPO in April.
Investor demand has been buyed by HHI's outstanding recent sales numbers. The $8.6 billion in orders collected over the course of the year through July represent the strongest performance the firm has seen since 2014. The influx of order deposits has brought HHI's net borrowing ratio down to about 35 percent - roughly a third of the ratio for its domestic competitors. HHI also holds the contract for Maersk's next generation of methanol-fueled container ships, putting the yard at the forefront of the decarbonization of deep-sea shipping.
With more than 1,600 institutional investors showing interest in buying in, HHI said that it will price its shares at the high end of the indicative range it published in August, selling at about $52 per share. At a total volume of 18 million shares, the IPO should bring in about $930 million.
One quarter of the IPO is set aside for retail investors, and early public subscriptions start on September 7-8. HHI's trading debut on the Kospi market is set for September 17.
HHI says that it plans to use a substantial fraction of the funds to support three main initiatives - vessel technology, the establishment of a "smart shipyard," and investment in offshore hydrogen infrastructure. Specifically, it has plans to invest $270 million in green propulsion and digital ship technology development, $275 million in smart shipyard construction and $110 million in hydrogen infrastructure. The firm aims to solidify its position as a builder of high value-added ships by focusing on hydrogen, ammonia and electric-powered vessels, and it intends to accelerate the development of its autonomous navigation program.
“We would like to thank all the institutional investors who valued both our capacity and growth potential high. We are certain that our company will secure sweeping competitiveness by opening a new chapter through the IPO,” said Han Young-seuk, CEO of Hyundai Heavy Industries.