Samsung Heavy Raises Nearly $1 Billion

Photo Of Drillship Deep Ocean Clarion under Construction At Samsung Heavy Industries by John Konrad ©2010

By Joyce Lee (Reuters)  South Korea’s Samsung Heavy Industries Co Ltd said on Friday its board of directors have approved a plan to raise about 1.1 trillion won ($985.22 million) via a rights issue as the shipbuilder struggles to cope with a prolonged downturn.

Samsung Heavy, part of the Samsung Group conglomerate, has been planning to sell share as it copes with deep losses stemming from a drop in orders for new vessels. The government expects a 20 percent drop in major shipbuilders’ capacity by 2018 from 2015.

The company said in a regulatory filing it plans to issue 159.1 million new shares at 6,920 won each, a 30 percent discount to Thursday’s closing price of 9,890 won, with the new shares to be listed on Nov. 28.

“We decided to pursue a rights issue in order to respond proactively to uncertain market conditions and secure funding for the company’s operations in a stable manner,” Samsung Heavy Chief Executive Park Dae-young said in a separate statement.

Samsung Heavy, Hyundai Heavy Industries Co Ltd and Daewoo Shipbuilding & Marine Engineering Co Ltd – the world’s biggest shipbuilders by orders, and all based in South Korea – this year announced plans to sell up to 4.8 trillion won in combined assets and find 3.6 trillion won through cost cuts.

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