Hyundai shipbuilding stocks plunge

AFP, SEOUL: Shares in Hyundai Heavy Industries plunged by more than a quarter yesterday after the world’s largest shipbuilder by sales announced a plan to issue new stocks in a bid to shore up its ailing finances.

The South Korean firm has struggled amid an industry-wide slump in recent years, as global demand slowed and competition from China intensified while overcapacity slashed prices.

Hyundai announced on Tuesday the plan to raise 1.3 trillion won ($1.2 billion) by issuing new shares—a move that would dilute share values—and to list Hyundai Oilbank, its refining unit, on a local stock market next year.

It also released on Tuesday a grim earnings forecast for this year, in which its sales would be more than halved to 15.3 trillion won from 39.3 trillion won in 2016, before falling further to 13.6 trillion won in 2018.

The forecast also flagged operating profit of 46.9 billion won for 2017 -- a significant decrease from 1.6 trillion won a year ago—sparking concerns over its overall finances.

The news sent Hyundai shares plummeting 29 per cent, close to the daily limit of 30 per cent, to finish at 96,900 won in Seoul, while the share price of its subsidiary Hyundai Mipo Dockyard also fell by 16 per cent.

Hyundai Heavy Industries said the capital raised by the share increase and the initial public offering of the refinery unit would be used to cover operating costs as well as for research and development.

 

Hyundai shipbuilding stocks plunge

AFP, SEOUL: Shares in Hyundai Heavy Industries plunged by more than a quarter yesterday after the worlds largest shipbuilder by sales announced a plan to issue new stocks in a bid to shore up its ailing finances. The South Korean firm has struggled amid an industry-wide slump in recent years, as global demand slowed and competition from China intensified while overcapacity slashed prices. Hyundai announced on Tuesday the plan to raise 1.3 trillion won ($1.2 billion) by issuing new sharesa move that would dilute share valuesand to list Hyundai Oilbank, its refining unit, on a local stock market next year. It also released on Tuesday a grim earnings forecast for this year, in which its sales would be more than halved to 15.3 trillion won from 39.3 trillion won in 2016, before falling further to 13.6 trillion won in 2018. The forecast also flagged operating profit of 46.9 billion won for 2017 -- a significant decrease from 1.6 trillion won a year agosparking concerns over its overall finances. The news sent Hyundai shares plummeting 29 per cent, close to the daily limit of 30 per cent, to finish at 96,900 won in Seoul, while the share price of its subsidiary Hyundai Mipo Dockyard also fell by 16 per cent. Hyundai Heavy Industries said the capital raised by the share increase and the initial public offering of the refinery unit would be used to cover operating costs as well as for research and development.