‘Business Model Transformation’ and ‘Fuel Cell Free Donation’ Bring Positive Momentum to Doosan Heavy Industries’ Capital Increase

Gas Turbine of Doosan Heavy Industries & Construction

[Asia Economy Reporter Ki-min Lee] Doosan Heavy Industries & Construction, which is preparing for a paid-in capital increase worth about 1 trillion won, has received a favorable breeze due to its business restructuring and the free donation of Doosan Fuel Cell shares by Doosan Chairman Park Jeong-won and others.

According to Doosan Heavy Industries & Construction on the 28th, the company will conduct subscription with shareholders and the employee stock ownership association on the 3rd and 4th of next month. On the 30th of this month, the issuance price will be finalized considering the first scheduled issuance price (9,640 won) and the stock price so far.

Earlier this year, Doosan Heavy Industries & Construction’s stock price fell below the par value (5,000 won), but after the announcement of the Green New Deal policy, it soared to the mid-10,000 won range. It then dropped to the low 10,000 won range following news of the sale of Doosan Infracore, but rebounded to 17,100 won (closing price on the 27th) ahead of the paid-in capital increase.

The new shares to be issued by Doosan Heavy Industries & Construction this time amount to 121,495,330 shares. This accounts for 47.9% of the shares currently circulating in the market.

Doosan Corporation, the holding company of the Doosan Group, plans to invest 420.3 billion won in Doosan Heavy Industries & Construction’s paid-in capital increase using funds raised from asset sales such as Doosan Tower, Motrol BG, and Doosan Solus shares.

The approximately 1.2 trillion won raised through this capital increase will be used to repay loans borrowed from creditors such as KDB Industrial Bank and the Export-Import Bank of Korea.

Doosan Heavy Industries & Construction’s financial structure deteriorated due to a sharp decline in orders amid the coal phase-out and nuclear phase-out, but it has been gradually increasing new orders through eco-friendly renewable energy businesses recently.

The cumulative orders for Doosan Heavy Industries & Construction in the third quarter of this year reached 2.57 trillion won. This is a 19.4% increase compared to the same period last year, which recorded new orders of 2.1484 trillion won. Up to the third quarter, Doosan Heavy Industries & Construction secured orders for projects such as the Gimpo combined heat and power plant, Boryeong Unit 4 eco-friendly improvement, and waste-to-energy (WtE) plants.

In addition, following the government’s Green New Deal policy, the company is developing gas turbines and actively participating in large-scale domestic offshore wind power projects.

Moreover, the free donation of Doosan Fuel Cell shares by Park Jeong-won, chairman of Doosan Corporation, and other special related parties, which is regarded as a private contribution, is expected to act as a positive factor for Doosan Heavy Industries & Construction’s paid-in capital increase.

On the 26th, Chairman Park disclosed that special related parties donated a total of 12,763,557 common shares of Doosan Fuel Cell (23% stake) to Doosan Heavy Industries & Construction free of charge. As a result, Doosan Heavy Industries & Construction secured a 17.77% stake including preferred shares, becoming the largest shareholder of Doosan Fuel Cell.

Synergy effects are also expected between the eco-friendly energy businesses of Doosan Heavy Industries & Construction and Doosan Fuel Cell. Doosan Fuel Cell currently holds a dominant position in the hydrogen fuel cell market for power generation. It is anticipated that Doosan Fuel Cell will be able to enter the global market by leveraging Doosan Heavy Industries & Construction’s engineering, procurement, and construction (EPC) capabilities and global customer network.

This content was produced with the assistance of AI translation services.