For Normal Operation
Samsung Heavy Industries finalized a plan for a capital increase of 1.101 trillion won (US$957 million) with consideration shortly after raising the number of shares that could be issued at a temporary general shareholders meeting. Samsung Heavy Industries resolved a matter to change its articles of association at the temporary general shareholders meeting held in the International Meeting Hall of the Gyeonggi Creative Economy and Innovation Center in Seongnam in the morning of August 19. Then the company held a BOD meeting and decided to increase its capital by 1.101 trillion won (US$957 million) for an improvement in its financial structure.
The capital increase method is public subscription to forfeited shares after offering to shareholders. The new shares totaled 159.12 million. The expected issue price was set at 6,920 won (US$6.017) with the application of a 20% discount rate. The finalized issue price will be finally decided on November 2 through the calculation of first and second issue prices. 31.82 million shares, 20% of the new shares will be allocated to the employee stock ownership association ahead of others.
“We began to push forward with the capital increase with consideration in order to preemptively cope with uncertain market situations and raise operation funds stably,” said Park Dae-young, president of Samsung Heavy Industries about why the company went ahead with the capital increase.
On the other hand, Park mentioned an entry into new business in addition to shipbuilding. “We are considering taking part in project management and operation and management (O&M) with our achievements and experience,” Park said when asked about what other options the company had in addition to shipbuilding by a shareholder in the general shareholders meeting.
“Samsung Heavy Industries has delivered many ships and many owners have asked for O&M. But most of the O&M requests have been going to Singapore among others,” Park said. “If we who know ships better than any others carry out O&M services, it will do ship owners and us much good.”
“We are questioning why we have to build a ship at Geoje Dockyard only,” Park said. “We do not need to stick to building a ship at Geoje Dockyard only. We can outsource the work to companies in China or Indonesia or small and mid-sized shipbuilders in Korea.”
“Moreover, we win an order and manage the whole project. But we can outsource actual shipbuilding work to other companies.” Park added. “The objects of outsourcing can be small and mid-sized vessels that Samsung Heavy Industries have not built yet,” said a representative of Samsung Heavy Industries.