Doosan Engineering & Construction (E&C) has raised 315 billion won ($469 million) mostly through placement of new shares to sister companies and related individual shareholders amid low demand from retailers in the public offering.
According to the result of its new share sale on Wednesday, Doosan E&C was estimated to have raised 305 billion won from its controlling owner Doosan Heavy Industries and Construction and 10 billion won from minority shareholders.
With the completion of new share sale, Doosan E&C raised total 315 billion won, missing its fund-raising target of 420 billion won. A total of 334,661,354 new shares were issued for 1,255 won per share. Of these, 20 percent, or 66,932,270 shares were allocated to the employee stock ownership scheme and the remainder to existing shareholders.
The offering drew tepid interest from minority shareholders due to power stock performance.
Doosan E&C’s share value tumbled 32.8 percent since the recapitalization plan was announced on Feb. 14.
With the latest capital increase, the majority shareholder’s stake in Doosan E&C will rise from 73.38 percent to 88.89 percent, a fraction short of a mandatory rule to disperse ownership shares to avoid delisting on the Kospi bourse.
Doosan E&C will use the proceeds to cut costs and repay debt, lowering its debt ratio to 267 percent from 552.5 percent.
Separately, Doosan Heavy Industries targets capital increase by 471.7 billion won through offering of 85 million shares for two days starting Wednesday at 5,550 won a piece. Of these, 20 percent, or 17 million shares, were allocated to the employee stock ownership scheme and the remainder to existing shareholders.
By Cho Hee-young and Minu Kim
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