Korean shipbuilder Hyundai Samho Heavy Industries raised $375 million in an accelerated block in building materials manufacturer KCC Corp on Wednesday night.
Hyundai, the world's fourth largest shipmaker, offered some 803 million shares between W507,000 to W523,000 per unit under the leads of Citi and Daewoo Securities, representing a 3.9% to 6.8% discount to the November 19 close of W544,000 per unit, according to a term sheet.
The shipbuilder sold 803 million shares at P517 per unit, a 4.9% discount to the November 19 close, and raised $375 million from the share sale. It offloaded its entire stake, which equated 7.6% of the company’s outstanding shares.
The book was multiple times oversubscribed on Wednesday night but allocations were still being finalised on Thursday morning.
Roughly 130 lines participated in the book, which was nearly three times covered. It was very top heavy, with the top 5 accounts making up 60% of the deal.
The deal would have been well covered with just the international tranche but strong domestic demand tilted the geographic allocation split slightly towards Korean long-only institutional investors, according to sources close to the deal.
Sixty percent of the international tranche was made up of long-only investors and 40% hedge funds. KCC, previously known as Kumgang Korea Chemical, produces glass, building materials and flooring.
The company posted disappointing third quarter earnings, with its net profits of W57.9 billion falling below 17% below consensus. Although the company did not break out divisional financials, research suggests that the company’s margin’s dropped amid shipbuilding and auto sector weakness.
Construction materials, meanwhile, likely fell due to slowing demand for materials in PVC windows and doors, Bloomberg research notes.
SK Gas
It was also a busy night for blocks in Korea, with the co-CEO of SK Gas offloading 533.3 million shares in the company and raising $59 million in the process. Shares priced at the bottom of the indicative range at W122,000 per unit, a 8.3% discount to the November 19 close of W133,000.
The UBS-led deal initially sought to price shares between W122,000 per unit and W126,000 per unit, representing an 8.3% to 5.3% discount, according to a term sheet.
Chang-Won Choi, the selling shareholder, will use proceeds to invest in a number of SK Gas’s other underlying companies, sources told FinanceAsia, noting that the accelerated placement was more like a cross-trade.
Roughly half of the deal was covered when it launched on Wednesday afternoon, and books formerly closed at 6:30pm. Post-launch, most of the demand came from Korean long-only institutional investors. The deal was roughly split evenly between domestic accounts and global institutions. The international tranche had a mix of hedge funds and long-only investors, sources said.
The Philippines
Meanwhile, Philippine conglomerate Ayala Corp raised $275 million in a top-up placement on Thursday morning in one of the largest placement deals in the country so far this year.
Some 18.8 million shares, or 3% of enlarged share capital, were initially offered between P660 and P680, a 5.2% to 7.9% discount to the November 19 closing price of P717. CLSA acted as a sole global coordinator, and shared joint bookrunning responsibilities with Credit Suisse on the deal.
The base deal size was of $200 million. The issuer priced shares at P660 per unit Thursday morning, with solid demand allowing the company to exercise the upsize option and boost the total size to $275 million.
More than 70 lines participated in the book, with the top 15 allocations accounting for 80% of the total deal size, according to sources close to the deal. Both existing and new long only investors placed orders for Ayala. The geographic split was also diverse, with sources noting that institutions from Asia, Europe and the US participated.
Ayala, which has banking, real estate, telecoms and water utility businesses through its subsidiaries, is the fourth largest company in the Philippines with a market cap of $9.5 billion. Its trading volume is 46 days.
Proceeds will go towards power and infrastructure investments, according to a termsheet. There is a 60-day lockup period. Its consolidated revenues in the third quarter increased by 17% to P134.5 billion ($3 billion), with 85% comprising of food sales.
