Samsung Heavy Industries announced Wednesday that it will raise 1.5 trillion won ($1.3 billion) by issuing shares by May to pay off its snowballing debt. The announcement immediately led to the company‘s shares hitting the lowest in a year.

Through the capital increase, the company plans to pay corporate bonds and other debts maturing next year, while pre-emptively responding to an anticipated reduction in borrowings due to the grim outlook of its performance.

Shares of the Korean Shipbuilder in morning trade Wednesday fell by some 27 percent to 9,120 won ($8.3), marking the lowest point since December last year, when the shares fell to 8,840 won.

(Yonhap)
(Yonhap)

The company on Wednesday reported in a regulatory filing that the company’s operating loss this year is expected to reach 490 billion won and that of next year to 240 billion won, largely due to sluggish demand for new vessels and offshore projects.

The shipbuilding company also projected its annual sales in the next year to decrease to 5.1 trillion, from 7.9 trillion won this year, the company added in a regulatory filing.

The firm had already raised 1 trillion won in November last year by issuing shares to secure funds for operation, while struggling with oversupply and declining orders.

By Shim Woo-hyun ()