Hyundai Engineering, the plant construction unit of South Korea’s Hyundai Motor Group, has kicked off the process for its initial public offering (IPO) on the main Kospi, which could be realized as early as this year.

Hyundai Engineering last week sent out invitation letters to local and multinational securities firms and investment banks to bid for its IPO underwriting, according to investment bank industry sources on Tuesday. Bidders are required to send their proposal by Apr. 23.

Hyundai Engineering which celebrates its 50th anniversary this year has continued organic and inorganic growth since the 1980s and was once merged into Hyundai Engineering & Construction before its spinoff. After 2010, Hyundai Engineering diversified its plant-focused business into construction of commercial buildings and apartments and combined its business with Hyundai Motor Group’s another construction unit Hyundai Amco in 2014.

Hyundai Engineering has thought over many ways to increase its corporate value and eventually decided to go independent through an IPO instead of a merger with Hyundai E&C, a company official said.

Hyundai Engineering’s majority shareholder is Hyundai E&C whose controlling stake is 38.6 percent. Other major shareholders include Hyundai Motor Group`s chairman Chung Eui-sun (11.7 percent), Hyundai Glovis (11.6 percent), Kia Motors (9.3 percent), and Hyundai Mobis (9.3 percent).

Hyundai Engineering’s consolidated operating profit came to 258.7 billion won ($230 million) last year over sales of 7.18 trillion won. Sales grew 5.3 percent on year but operating profit fell 36.6 percent.

Analysts estimate Hyundai Engineering is valued at about 10 trillion won based on its current over the counter stock price.

If Hyundai Engineering’s IPO goes as planned, it will be the first Hyundai name to go public in two years. The group’s latest IPO was Hyundai Autoever, the system integration arm.

By Kang Woo-seok and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]