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LS Marine Solution's stock price has been on an upward trajectory, suggesting that the company will be able to raise more capital than initially planned.
According to the Financial Supervisory Service's electronic disclosure system on June 11, LS Marine Solution will raise 278.3 billion won by allocating 0.625 new shares for each existing share. The planned issue price per new share is 14,220 won, with a total of 19.57 million shares to be issued.
The final issue price for the new shares will be determined on July 30, and subscriptions from existing shareholders will be accepted over two days, from August 4 to August 5. If there are any unsubscribed shares, a public offering will be held, and the new shares will be listed on August 28.
LS Marine Solution has decided to use the raised funds to order a 13,000-ton class cable-laying vessel (CLV) to respond to large-scale offshore wind power projects. The company expects this move to strengthen its operational efficiency and order-winning capabilities in overseas offshore wind installation markets such as Asia, Europe, and North America. Between 2028 and 2030, LS Marine Solution aims to secure not only offshore wind projects off the coast of Taiwan but also the high-voltage direct current (HVDC) project, which is a power grid network along the west coast.
LS Cable & System, the largest shareholder of LS Marine Solution, made the investment decision while also considering the possibility of winning a turnkey contract for the design, manufacturing, and installation of a submarine cable plant currently under construction on the east coast of the United States. Taking into account that the LS Cable & System plant in the US is scheduled for completion in the first half of 2027, the target delivery date for the vessel has been set for around 2028.
Although the large-scale capital raising was an inevitable decision to secure growth drivers, concerns about shareholder value dilution have increased. On the day after the board of directors resolved the rights offering on May 26, the stock price fell by nearly 8%, dropping below the 18,000 won mark. Although this is still higher than the planned issue price for the new shares, the outlook for subscriptions from existing shareholders remained uncertain.
LS Marine Solution's stock price began to surge significantly from June 4, the day after the presidential election. Expectations that President Lee Jaemyung would accelerate a renewable energy-focused "energy mix" strategy influenced the stock price. As the government pushes forward with the "West Coast Energy Expressway," new business opportunities related to submarine cables are expected to emerge. LS Marine Solution plans to actively participate in the West Coast HVDC Energy Expressway project together with LS Cable & System. HVDC is a technology that enables the transmission of up to three times more power over long distances with less loss compared to traditional high-voltage alternating current (HVAC) transmission.
The previous day, LS Marine Solution's stock price rose to 28,500 won, up about 59.4% compared to immediately after the capital raising news. This has created the possibility of increasing the fundraising amount by raising the issue price.
Kim Sowon, a researcher at Kiwoom Securities, explained, "The introduction of the vessel will have a significant impact on mid- to long-term growth," adding, "After the introduction of the 13,000-ton class CLV, we expect about 150 billion to 200 billion won in new annual sales." She further stated, "As demand for long-distance projects increases, submarine cables are also becoming larger to enable high-capacity transmission and minimize transmission losses," and added, "We will proactively respond to the expansion of the submarine cable market."
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