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Oilbank applies for domestic IPO
Posted on Wednesday, 11 July 2018 10:36
Hyundai Heavy Industries has taken the first step towards listing majority-owned subsidiary Hyundai Oilbank via an initial public offering (IPO) that the media suggests could fetch between USD 1.00 billion to USD 1.87 billion.
At this kind of price range, the debut would be one of South Korea’s largest on record, joining only eight others worth over USD 1.00 billion, according to Zephyr, the M&A database published by Bureau van Dijk.
As the process is still in the early stages, the petroleum and refinery operator has only just applied to gain admittance to Korea Exchange’s main board and still has several more regulatory hoops to jump through.
NH Investment & Securities and Hana Financial Investment are underwriters for the IPO, which sources with knowledge of the matter told Yonhap could happen as early as October.
These people noted the timing of the debut is dependent on how long the assessment and pre-order processes take.
Oilbank, a core 91.1 per cent-owned affiliate of Hyundai Heavy Industries, is a vertically integrated player in the petrochemical aromatics space with activities from crude oil to benzene, toluene, and the three xylene isomers (BTX).
Along with production plants for mixed xylene and BTX with annual capacity of 1.20 million and 1.40 million tons, respectively, the company is also diversifying into base materials with a steel chemical facility.
Oilbank had sales of KRW 16,387 billion, an operating profit of KRW 1,232 billion (USD 1.11 billion) and net profit of KRW 937.95 billion in the financial year ended 31th December 2017.
The group is aiming to achieve operating profit of KRW 1,500 billion on revenue of KRW 26,000 billion by 2020.
It intends to reach this target by tapping into overseas markets and further diversifying its business so that non-petroleum activities account for over 40.0 per cent of operating profits.
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