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| A large LNG vessel developed by Hyundai Heavy Industries (HHI) Courtesy of HHI |
By Kim Yoo-chul
Korea Shipbuilding & Offshore Engineering (KSOE), a holding firm of Hyundai Heavy Industries (HHI), plans to move forward with HHI's initial public offering (IPO) as a fundraising campaign to invest in the group's future business amid a gradual recovery in the COVID-19 situation.
"HHI will invest up to 1 trillion won over the next five years to strengthen the group's competitiveness. Unlisted HHI plans to push for an IPO within this year, and we are aiming specifically to issue 20 percent new shares as a financing plan," an HHI official said, Tuesday. KSOE owns a 100 percent stake in HHI.
HHI identified the development of eco-friendly vessels, manufacturing facilities and next-generation shipbuilding technology as its main objectives.
The IPO plan came after KSOE CEO Ka Sam-hyun told investors that the company was expecting to receive around $15 billion in new orders this year, including up to 10 vessels from Qatar Petroleum's liquefied natural gas (LNG) project.
The shipbuilding and shipping markets are showing signs of recovery as the effects of COVID-19 are increasingly being tamed. On the back of Washington's investments and increased demand for eco-friendly vessels propelled by solid Asia-America trade, ship owners are asking top shipbuilders to build more before a full market recovery.
Plus, according to market tracker Clarkson Research, global shipbuilding orders this year will grow 22 percent year-on-year for 43.4 million gross tonnage.
Echoed by such favorable market conditions, HHI said the money to be raised from the planned IPO will also be used to possibly acquire firms with fuel electric energy technologies, which will help it take steps for environmental, social and corporate governance (ESG) management.
"The paradigm of the global shipbuilding industry is focusing more on developing next-generation technology. We will do what we can do," another HHI official said.
