(ATTN: CHANGES headline, para 4 to clarify)
SEOUL, Oct. 13 (Yonhap) -- Doosan Bobcat Inc., a unit of power and construction equipment conglomerate Doosan, said Thursday it has decided to cut its initial public offering price and the number of stocks to be sold amid lukewarm market response.
Last week, the company said it would push back its planned IPO on the local stock market, as investors wanted it to lower the IPO price. In August, the company received preliminary approval for its IPO.
Doosan Bobcat lowered the price band to between 29,000 won (US$26) and 33,000 won for the IPO, compared with the previously offered range of between 40,100 won and 50,000 won. The IPO size may reach up to 1 trillion won if the price is set at the upper limit.
Doosan Bobcat also said it plans to sell some 30 million stocks held by its affiliates such as Doosan Infracore Co., smaller than the previously-hoped-for 49 million shares. If the company sought to proceed with its original IPO plan, Doosan Bobcat's IPO could reach some 2.45 trillion won, becoming the country's second-biggest market debut since Samsung Life Insurance Co.'s 4.89 trillion won in 2010.
The market debut is set for Nov. 18.
Doosan Infracore Co. and Doosan Engine Co. own a majority 78.4 percent stake in Doosan Bobcat, which operates 31 subsidiaries in 20 countries. Doosan Bobcat is a leading player in the small construction machinery sector in the United States.
The IPO plan is part of the Doosan Group's efforts to improve its financial status. The power-to-construction equipment conglomerate has raised trillions of won by selling assets in recent years to survive a prolonged slump in the construction industry.
The Doosan Group hopes its debt will be reduced to 8 trillion won from the 11 trillion won recorded at the end of last year with the proceeds from the IPO.
Doosan Bobcat's major products include a compact track loader and a mini excavator with market shares topping the North American market.
Doosan Bobcat has seen sharp growth in the past few years.
Last year, Doosan Bobcat posted an operating income of 386 billion won on sales of 4.04 trillion won.
In the first half of the year, Doosan Bobcat logged an operating income of 235 billion won on sales of 2.15 trillion won.
Doosan Bobcat said it seeks to expand its presence in China with market-tailored construction equipment.
In 2007, Doosan Infracore acquired Bobcat and other construction equipment units from North Carolina-based Ingersoll Rand PLC for $4.9 billion.
JP Morgan and Korea Investment & Securities Co. are the lead managers for the IPO.
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