Hyundai Heavy Industries Holdings (HHIH) has raised about KRW 800bn ($720m) through a pre-initial public offering of Hyundai Global Service.
HHIH said it has sold a 37% stake — or 1.52m shares — of its wholly owned ship-repairing unit Hyundai Global to US private equity giant KKR for KRW 646bn ($580m).
In addition, HHIH will get a cash dividend of KRW 150bn from Hyundai Global under the deal with KKR.
The sale of Hyundai Global shares comes ahead of an IPO planned for April.
HHIH said it will use the $720m for investments into robotics, artificial intelligence and hydrogen.
HHIH is a holding company of Korea Shipbuilding & Offshore Co (KSOE), which owns Hyundai Heavy Industries, Hyundai Samho Heavy Industries and Hyundai Mipo Dockyard.
Hyundai Global posted KRW 1trn in sales in 2020, generating an operating profit of KRW 157bn. It last reported an operating profit KRW 56.4bn in 2017.
HHIH said KKR estimated the valuation of Hyundai Global at around KRW 2trn.
HHIH plans to hold a shareholder meeting in late March to discuss its management agenda, including a five-to-one stock split.
The split stocks are slated to be traded on the Seoul Stock Exchange from 12 April.
KKR is a US investment giant that claims on its website to manage assets worth $234bn.
It first gained a presence in the shipping industry in 2013 when it partnered with bulker and boxship owner Borealis Maritime to form Embarcadero Maritime — a joint venture to invest in distressed shipping assets.
Borealis Finance is one of the portfolios managed by Embarcadero Maritime.
