Hyundai Heavy Industries Boosts Capital with New Shares
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Hyundai Heavy Industries Boosts Capital with New Shares
The shipyard secures 1.235 tln won thru new shares and spends 820 bln won to pay off debts to cut debt ratio to 78 pct to make the shipbuilding industry look good

26(Mon), Mar, 2018

An aerial view of Hyundai Heavy Industries Ulsan Shipyard. (Photo: HHI)

Hyundai Heavy Industries has succeeded in boosting its capital through the issuance of new shares for the share holders valued at 1.235 trillion won, the company said recently.

The shareholders were given the new shares issued and distributed to them to boost the company’s capital from March 8-9 and the shareholders agreed to pay for the new shares given to them at the ratio of 107.8 percent, the company said on March 12. The shareholders asked to pay for 1,348,910 shares exceeding the number of the new shares issued to increase the capital totaling 12,500,000 new shares.

The members of the Our Company Shares Cooperative made of the shareholders and entitled to the right to purchase 2,473.690 new shares signed contracts to buy 9,743,741 shares. A total of 1,263,479 shares were over subscribed and the shareholders will get the new shares at the ratio of 22.4 percent.

Odd number shares totaling 15,868 shares will be offered to the general subscribers for the new shares on March 13, and 14 at the price of 98,800 won per share.

The company will secure 1.235 trillion won on March 16 when the new shares were paid up and will pay off some of its debts with the new fund to cut its debt ratio to 78 percent from 89.9 percent. The company will spend 820 billion won out of the new fund secured through the issuance of new shares to pay off its debts while the balance will be spent on R&D on the development of environment-friendly and SMRT ships.

Securities sources are sure that the success of Hyundai Heavy Industries in boosting its capita through the issuance of new shares would go a long way to  help improve the share prices of other shipbuilding companies. The Hyundai Heavy Industries shares finished the day with 145,500 won per share on March 16, up 2.11 percent from the preceding day bringing total share price increase so far to 44.8 percent in the new year.

The prices of other shipbuilding companies  such as Samsung Heavy and Daewoo shipbuilding have also been rising 98.9 percent and 44.9 percent respectively.

Hyundai Heavy Industries (HHI) is one of the biggest ship construction companies in the world. Its ship manufacturing facility in Ulsan, a South Korean city located on the south-eastern tip of the Korean Peninsula, is the largest shipyard in the world.

The shipyard extends across two and a half miles along the coast of Mipo Bay in Ulsan and covers an area of 1,780 acres. Due to its strategic location, the shipyard can be easily accessed from and to the open sea.

Construction on the Ulsan shipyard commenced in 1972 and it was commissioned in 1974. Meanwhile, HHI also christened two very-large crude carriers (VLCC), each of 260,000DWT. Construction of the ships as well as the shipyard was carried out simultaneously.

HHI commenced ship construction at its Ulsan shipyard in 1972 with two VLCCs. A christening ceremony to mark the completion of the first two VLCCs was held in June 1974. Ten years later, Ulsan shipyard delivered its first two VLCCs and achieved ten million DWT in aggregate ship production.

The shipyard reached a 20 million DWT production milestone in 1988 and 50 million DWT in 1997. It achieved an aggregate production mark of 100 million DWT in 2005. From 1972 to 2013, HHI has delivered 2,981 vessels to 268 ship-owners in 48 countries. Today, it commands around 16% of the world ship manufacturing market.

In 2011, a total of 82 vessels were built in the shipyard with an aggregate of 10.1 million DWT. HHI surpassed the 100m gross tonnage (GT) in ship deliveries in 2012. 

It received an order to construct the world’s biggest containership of 19,000TEU in 2013.

Different types of vessels manufactured in Ulsan shipyard include bulk carriers, container ships, tankers, VLCC, product carriers, multipurpose cargo ships, ore-bulk-oil carriers, Ropax, pure car carriers, LPG carriers, RO-RO ships, chemical tankers, offshore rigs / barge and LNG carriers. 

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