[Public Notice+] IPO Withdrawal of Hyundai Engineering Amid Stock Market Crash and Box Office Failure... With Tears

[Asia Economy Reporter Lee Seon-ae] Hyundai Engineering has withdrawn its IPO after failing to attract sufficient demand in the book-building process for listing on the KOSPI market. The plan to raise up to 1.2 trillion KRW has fallen through. The recent sharp decline in the domestic stock market and the collapse of an apartment building in Gwangju, which worsened investment sentiment across the construction industry, influenced this outcome.

On the 28th, Hyundai Engineering announced the decision to halt the IPO through a withdrawal filing. Hyundai Engineering stated, "After discussions with the joint lead managers, we canceled the remaining schedule and submitted the withdrawal report," adding, "We considered various conditions, including the difficulty in receiving a proper valuation of the company." It further explained, "No shares were allocated to institutional investors who participated in the book-building, and since subscription had not yet been conducted for retail investors, there is no issue regarding investor protection."

It was reported that the final demand-to-offer ratio in the book-building process conducted from the 25th to this day for domestic and foreign institutional investors was below 50 to 1. This is even lower than Krafton's 243 to 1, which recorded the lowest demand-to-offer ratio among major IPOs last year. Accordingly, the offering price was at risk of falling below the lower end of the desired range of 57,900 KRW, leading to the decision to withdraw.

An investment banking industry insider said, "On the first day of the book-building on the 25th, some institutions proposed the upper end of the offering price, but most withdrew their participation the next day," adding, "The sharp drop of the KOSPI index to the 2600 level caused significant market volatility, and investment sentiment toward the construction industry was at its worst, which was a major burden."

Last year, SK Lubricants and Hyundai Oilbank also withdrew their IPOs after failing to attract sufficient demand in the book-building process.

Hyundai Engineering has no set schedule for a new offering but plans to proceed again when conditions allow for a proper valuation.