KBI Dongyang Steel Pipe, a company listed on the Korea Exchange's main board, fell in early trading on the 18th. Investor sentiment appears to have worsened on news of a rights offering worth 50 billion won.
As of 9:37 a.m. that day, KBI Dongyang Steel Pipe was trading at 2,745 won, down 120 won (4.19%) from the previous trading day.
KBI Dongyang Steel Pipe disclosed after the regular session closed the previous day that it had decided on a rights offering worth 50 billion won. The rights offering will be conducted through a shareholder allocation followed by a public offering of forfeited shares. It plans to issue a total of 23,866,000 new shares.
The issue price will be finalized on Nov. 28, with the company's indicated price set at 2,095 won per share. That is 27% cheaper than the previous day's closing price of 2,865 won. Subscriptions for existing shareholders will run from Dec. 3 to 4, and the new shares are scheduled to be listed on the 26th of the same month.
KBI Dongyang Steel Pipe said it plans to use the funds raised through the rights offering as operating capital. The company said, "It will be used to purchase materials and supplies needed for next year's exports of steel pipe products to the U.S. market, the Taiwan offshore wind power project, and the Iraq pipeline construction project."