Hyundai Heavy Sells Stake in Hyundai Motor image

Hyundai Heavy Industries aims at selling a stake in Hyundai Motor with $636 million, trying to boost its financial health.

Hyundai Heavy offers 3.2 million Hyundai Motor shares at 219,500-228,500 Korean won, which would be a discount of 3.9% from Monday’s closing price. The company plans to raise 731 billion Korean won ($636 billion), which would be South Korea’s biggest stock offering since January 12th when chemical producer KCC Corp sold a $602 million stake in Hyundai Heavy.

Hyundai Heavy declared that the stake, with a box value of 746.4 billion won at the end of the first quarter, will help boost its financial structure. The company decided to sell the stake after Hyundai Heavy’s share price decreased 8% in July, to the lowest price in more than two years, with expectations that earnings in the second quarter will decrease more due to Europe’s debt crisis.

In June, Hyundai Oilbank, which is 9.1% owned by Hyundai Heavy, postponed an initial public offering worth $2 billion, due to volatile markets and the suspension of Iran crude imports on western sanctions. After the stake’s sale Hyundai Heavy will still own a 2% stake in Hyundai Motor.