Sampyo Group’s 3 affiliates to go public

[THE INVESTOR] Three affiliates of Sampyo Group are planning initial public offerings on Seoul’s main bourse before the group floats its own shares, sources said on July 21.

The key affiliates -- Sampyo P&C, Sampyo E&C and Sampyo Industry -- are looking at listing as a way to boost the group’s market value by raising funds. 

According to investment bank officials, Sampyo Group, a holding firm, sent out a request for proposals to seven brokerage houses to hire underwriters for the three IPOs.

Sampyo Group is currently mulling several options for the offerings -- three separate IPOs, two IPOs by merging two of them together, or one IPO combining all the three.

After a spin-off in 2013, ready-mixed concrete product manufacture Sampyo P&C and railway product maker Sampyo E&C which used to be under the same corporate umbrella became two separate entities.

Sampyo P&C posted 36.7 billion won (US$32.29 million) in net profit last year while Sampyo E&C logged 21 billion won.

The holding company, which is highly expected to go public soon, may put off its own IPO if the three affiliates’ stock offerings are able to raise sufficient funds to recoup its investment in the acquisition of Tong Yang Cement last year, the sources said.

The group plans to use the funds to repay its debt worth some 200 billion won incurred when it bought Tong Yang Cement with a private equity arm of state-run Korea Development Bank for 794.3 billion won last year. The company’s debt-to-equity ratio has increased by sixfold due to the transaction.

By Park Han-na (hnpark@heraldcorp.com)