Hyundai Engineering suspends IPO on poor pricing, LGES debut disappointment

Hyundai Engineering Co., the plant engineering unit of South Korea¡¯s Hyundai Motor Group, has suspended IPO process upon confirming tepid institutional demand during book-building amid unfavorable market conditions that even had been brutal on mega debutant LG Energy Solution.

Hyundai Engineering upon finding disappointing demand during two-day book-building session decided to withdraw its IPO plan until it can gain fair valuation for the company.

Its IPO prospectus was filed with the Korea Exchange last month for Kospi listing in February.

The book-building session that ended Wednesday, drew tepid response from institutions with competition ratio of several hundreds to 1 in stark contrast to over 2,000-to-1 ratio with LG Energy Solution that drew over 15,000 trillion won ($13 trillion) bids from institutions earlier this month.

The company¡¯s decision was made as investor sentiment in construction sector has soured and weak market environment, said an unnamed official from Hyundai Engineering. Future offering plan has not been decided, the official said, and the company will proceed with IPO when conditions improve.

The benchmark Kospi on Friday dipped below 2,600 during the day as foreign investors dumped local shares. The index plunged to as low as 2,591.53 in the morning before recovering to 2,651.63 by midday. It is the first time in 14 months for Kospi to hover below 2,600 mark.

The much-awaited LG Energy Solution after spectacular subscription demand became a disappointment during its first two days. Shares of LG Energy Solution plunged 10.59 percent to 451,500 won ($374.7) by midday Friday after 15.41 percent fall on the first day of debut on Thursday. The opening price was at 597,000 won, nearly double the offering price of 300,000 won. The stock price fall was led by foreign selling spree. On Thursday, offshore investors net sold 1.5 trillion won in LG Energy Solution shares.

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