Shares of Doosan Heavy plunge on reports of new share sale

By Nam Kwang-sik

SEOUL, Nov. 29 (Yonhap) -- Shares of Doosan Heavy Industries Co. tumbled Monday after it announced its plan to sell new shares to raise 1.5 trillion won (US$1.25 billion) last week.

Shares of Doosan Heavy closed at 19,900 won on the Seoul bourse, down 13.67 percent from the previous session, as institutional investors dumped their holdings worth 878 billion won.

During intra-day trading, shares of Doosan Heavy fell 14.75 percent to 19,650 won.

The sale of new shares at a company to raise funds usually hurts the company's share prices, as it decreases existing shareholders' equity.

Doosan Heavy said Friday its board of directors has decided to raise 1.5 trillion won by selling new shares to repay its debts and invest in eco-friendly business.

Doosan Heavy said it will use 700 billion won of the proceeds to repay its debts while investing 800 billion won in its new growth businesses, such as hydrogen turbines, offshore wind farms and small modular reactors.

Doosan Heavy said it plans to issue 82.87 million common shares at 18,100 won apiece.

Doosan Heavy also decided on Nov. 19 to hand over the managerial rights of its construction subsidiary Doosan Engineering & Construction Co. and the builder's 54 percent stake to The Zenith Holdings Co., an investment company, for 250 billion won.

Doosan Heavy, which has been carrying out a self-rescue plan, sold new shares worth 1.2 trillion won to repay its debts in December.

In March 2020, Doosan Heavy received a cash injection of 3 trillion won from its creditors, including the state-run Korea Development Bank, amid a liquidity crunch, in exchange for asset sales and other cost-cutting measures.

ksnam@yna.co.kr
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