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IPOs

Hyundai Oilbank applies for first-half IPO in 2022

The IPO expected to raise up to $1.7 billion, valuing the refiner at $7 billion-$8 billion

By Dec 14, 2021 (Gmt+09:00)

2 Min read

Hyundai Oilbank applies for first-half IPO in 2022 

Hyundai Oilbank Co., part of South Korea's Hyundai Heavy Industries Holdings Co., on Monday submitted an application for an initial public offering, which the company expects to raise up to 2 trillion won ($1.7 billion).

This is the refiner's third attempt at an IPO, after it swung to an operating profit of 851.6 billion won in the first nine months of this year, recovering from the pandemic-caused slump the previous year.

Its market value is estimated at 8 trillion to 9 trillion won ($7 billion-$8 billion), taking into account the sluggish stock market. The projected enterprise value is similar to the 8.1 trillion won estimated by Saudi Aramco in 2019, when it acquired a 17% stake in the refiner for 1.3 trillion won.

Considering the review of an IPO application usually takes 45 working days, Hyundai Oilbank is expected to list in the first half of the next year

Back in 2012, it applied for an IPO, but withdrew the plan because tumbling oil prices clouded its business outlook. Its second IPO attempt in 2018 was thwarted by audit delays by regulators.

SOARING PROFITS

Hyundai Oilbank's operating profit skyrocketed nearly 400% to 173.1 billion won in the July-September quarter from three months earlier. Analysts forecast its operating profit to top 1 trillion won in the entire year of 2021.

Sales climbed 55.7% to 5.2 trillion won during the same period. Accumulated sales reached 14.7 trillion won in the three quarters ending on Sept. 30, beating the previous year's.

The company will use the IPO proceeds for eco-friendly energy businesses such as white biotechnology, which refers to the use of biotechnology in industrial processes; eco-friendly chemical materials; and blue hydrogen.

Hyundai Oilbank plans to cut the refining business to 45% of its revenue by 2030 from the current 85%. In terms of operating profits, eco-friendly businesses will make up 70% by 2030.

To fund massive investments in the new sectors, it sold a 90% stake in Hyundai Oil Terminal Co. to a domestic company in July of this year for an undisclosed sum.

Recently, its parent company Hyundai Heavy sold a stake in the refiner to US data analytics firm Palantir Technologies Inc. for $20 million. The stake sale was aimed at building a big data platform and turning its operations into a smart factory as part of Hyundai Heavy’s push for the digital transformation of its entire business process.

Hyundai Heavy Industries Holdings is the largest shareholder of Hyundai Oilbank with a 74.1% stake, followed by Saudi Aramco with a 17% stake.

In September, Hyundai Heavy Industries Co. made a successful public offering, closing at almost double its IPO price on its first day of trading.

Write to Ye-jin Jun at ace@hankyung.com
Yeonhee Kim edited this article.
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