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KSOE shareholders furious as Hyundai Samho goes ahead with IPO plans

KSOE shareholders furious as Hyundai Samho goes ahead with IPO plans

Minority shareholders of the world’s largest shipbuilding organization, Korea Shipbuilding & Offshore Engineering (KSOE), are reportedly enraged after the firm reaffirmed its plans to go ahead with its previously scheduled IPO with Hyundai Samho Heavy Industries, one of its subsidiaries, this year.

When Hyundai Heavy Industries, KSOE’s subsidiary, was listed on the key Korean Composite Stock Price Index or KOSPI in September, the KSOE stock price plummeted.

According to reports, Ka Sam-Hyun, KSOE CEO and Vice-Chairman supposedly told the local securities analysts on Tuesday that Hyundai Samho will go on with the IPO as intended, despite its recent unsuccessful bid to buy Daewoo Shipbuilding & Marine Engineering.

As per the vice-chairman, the firm had committed to listing Hyundai Samho on the stock market until 2022 when Korean investor IMM invested ₩400 billion ($335 million) in it, but the deadline got postponed by two years. The IPO is a fulfillment of its commitment to IMM, which supported the company through the shipbuilding sector’s downturn, therefore Hyundai Samho's IPO will proceed as planned.

Hyundai Heavy Industries Group's KSOE will be the parent organization of the three major listed shipbuilders, namely, Hyundai Mipo Dockyard, Hyundai Heavy, and Hyundai Samho after the latter goes public.

Lee Sang-heon, an analyst at Hi Investment & Securities, stated that a subsidiary's IPO can result in the reduction of the parent company's stock price, harming minority shareholders.

Meanwhile, a recent accident, that turned fatal for an irregular employee at Hyundai Samho, is also heavily weighing on the shipbuilder as well as its parent company.

For the uninitiated, the accident occurred just a day after the IPO plan was announced by KSOE vice chairman, wherein a 50 year old female worker died at the company’s Yeongam shipyard in the South Jeolla Province after falling from a ladder while cleaning.

After the incident, Hyundai Samho CEO Kim Hyung-kwan issued a formal apology, stating that the company will rigorously manage such risk factors to effectively prevent such mishaps from reoccurring and compromising the worker's safety.

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