4 investors show interest in Ssangyong E&C’s capital increase
Published : 2012-11-23 23:48
Updated : 2012-11-23 23:48
Four domestic and foreign investors have expressed interest in Ssangyong Engineering & Construction Co.’s planned rights offering of more than 150 billion won ($138 million), which is aimed at resolving the liquidity crisis of the embattled builder, officials of the state-run debt-clearer said Friday.
The rights issue comes as Ssangyong’s creditors have been trying to sell the cash-strapped builder, the former construction arm of Ssangyong Group. Their latest attempt in August, fifth since 2007, fell through as a preferred bidder dropped its intent to buy the firm.
“There is a high possibility that the rights offering could succeed,” Chang Young-chul, the head of the Korea Asset Management Corp., said in a meeting with reporters on Thursday. The debt-clearer, the biggest shareholder of the builder with a 38.8 percent interest, has unsuccessfully tried to sell the company for years.
Another senior KAMCO official said about four domestic and foreign investors were seriously sounding out potential bids for its new shares to be issued by Ssangyong. He did not elaborate and asked not to be identified.
The comments came days after the builder vowed to carry out a rights offering of more than 150 billion won in an effort to improve its financial health.
Also Friday, Ssangyong spokesman Choi Seh-yong said his company is planning to issue more than 250 billion won worth of new shares, possibly with a face value of 5,000 won per share.
The rights issue, if carried out, is expected to help reduce the builder’s debt ratio to 300 percent from the current 698 percent. The move would also make the debt-clearer the No. 2 shareholder.
“The rights issue would completely normalize the company and it would give a big boost to the company in winning overseas contracts,” Choi said. The the builder of Singapore’s landmark Marina Bay Sands Hotel bagged overseas deals worth more than 1.6 trillion won this year.