Yeochun NCC plant explosion leads to bond sale fiasco Korean chemical company gets no bid for its bond offering on Monday
Translated by Ryu Ho-joung 공개 2022-02-16 08:10:50
이 기사는 2022년 02월 16일 08:09 thebell 에 표출된 기사입니다.
Yeochun NCC, a South Korean chemical company, shockingly received a zero bid for its bond offering on Monday as the company’s reputational risk is highlighted in the market by a deadly blast at its Yeosu plant.The company had planned to issue 200 billion won ($166.7 million) in bonds with 3-year and 5-year maturities. Initial price guidance was -30 to +30 basis points versus the average yield for the 3-year bond and -30 to +50 basis points versus the average yield for the 5-year bond.
The offering is underwritten by three brokerage firms KB Securities, NH Investment & Securities and Korea Investment & Securities.
The bond offering attracted little interest from investors, ultimately getting no bid during the book building on Monday.
This fiasco was due to an explosion at the company’s plant in Yeosu, South Jeolla Province, on Friday morning, which killed four people and injured four others. Shortly after the accident, labor ministry officers and police raided the plant’s on-site office and the company’s two vendors to find evidence of whether there was any violation of safety and health rules.
If any violation charges are proved, Yeochun NCC would be the country’s first petrochemical company penalized under the Severe Disasters Punishment Act, which went to effect in January.
The new law imposes at least one year of imprisonment or up to 1 billion won in fine on a company’s owner or chief executive who violates safety and health regulations, and up to 5 billion won in fine on a business entity.
It is likely that the explosion and the police investigation of Yeochun NCC will significantly impair the company's ability to raise capital, as South Korean investors increasingly integrate environmental, social and governance (ESG) factors alongside traditional financial data into their investment selection process.
Yeochun NCC, jointly owned by Hanwha Solutions and DL Chemical, heavily relies on external debt, with total borrowings of 1.58 trillion won and the total borrowings-to-total assets ratio of 47.2% at the end of September 2021. The company’s outstanding corporate bonds stood at 890 billion won as of February 10, 2021, according to a filing for its latest bond offering.
“It’s an embarrassing result,” an official at Yeochun NCC said. “We are considering options including extending the subscription period to attract orders.” (Reporting by Joon-woo Nam)
< 저작권자 ⓒ 자본시장 미디어 'thebell', 무단 전재, 재배포 및 AI학습 이용 금지 >
관련기사
best clicks
최신뉴스 in 전체기사
-
- 경남제약 품는 휴마시스, 유통네트워크·진단키트 '시너지'
- [Company Watch]글로벌텍스프리, 프랑스 자회사 '적자 전환'
- [Red & Blue]'주목도 높아지는 폐배터리' 새빗켐, 침묵 깨고 반등
- [HLB '리보세라닙' 미국 진출기]시장 우려 불식 나선 진양곤, 갑자기 마련된 기자회견
- 효성화학 특수가스 사업부, '경영권 지분 매각'으로 선회
- 한양, 만기도래 회사채 '사모채'로 차환한다
- 동인기연, 'GS 출신' 30년 베테랑 전호철 상무 영입 '성장 방점'
- 에스트래픽, 적자 '일시적 현상'... 2분기 수익개선 기대
- [Company Watch]'자회사 회생신청' 투비소프트, 성과 없는 신사업
- '크라우드 펀딩' 와디즈, '테슬라 요건' 상장 추진