Hyundai Engineering has announced plans to issue 500 billion won in private convertible bonds (CB) to strengthen its foundation for growth in the global energy sector.
On June 9, Hyundai Engineering held a special board meeting where it decided to proceed with the issuance of the convertible bonds. The funds will be used strategically to respond proactively to the expanding future energy market, including nuclear power and small modular reactors (SMRs), and to secure related business opportunities.
The convertible bonds will have a zero percent interest rate for both the coupon and maturity, with a five-year term. The conversion price is set at a 15% premium over the reference stock price, which is approximately 23% higher than the closing price of 122,300 won on June 9.
This capital increase is expected to positively impact Hyundai Engineering's financial health. If the conversion rights are exercised, the debt ratio will decrease, potentially leading to an upgrade in credit ratings, which could enhance the company's competitiveness in securing large-scale global projects and financing.
Hyundai Engineering aims to solidify its future growth drivers by securing investment capacity to flexibly respond to business opportunities arising from the expansion of the nuclear and new energy markets.
Industry experts view Hyundai Engineering's fundraising as a proactive measure targeting the global energy infrastructure market.
Kim Se-ryun, a researcher at LS Securities, stated, "With the trend of AI energy infrastructure gaining attention in the U.S. market, emphasizing nuclear power as the first project from the U.S.-Korea tariff negotiations is a significant boon. Hyundai Engineering's nuclear power and SMR projects have secured a visible order pipeline for this year beyond mere momentum."
Currently, Hyundai Engineering has a strong order backlog, including the two Palisades SMRs in the U.S. in collaboration with Holtec (worth approximately 5 trillion won), the EPC conversion of the Fermi large nuclear power plant in the U.S., the Team Korea Vietnam nuclear project, and two large nuclear power plants in Bulgaria. As the leading company in domestic nuclear construction, it is expected to demonstrate overwhelming performance compared to competitors through significant achievements this year.
Kim added, "Based on its record of constructing 24 out of 36 domestic large nuclear power plants and managing the Barakah nuclear power plant project in the UAE, Hyundai Engineering is also expected to explore opportunities in European markets such as Sweden, Finland, and Slovakia in collaboration with Westinghouse. The U.S. Trump administration's push for nuclear expansion will also provide additional opportunities for Hyundai Engineering, which is collaborating with U.S. firms."
* This article has been translated by AI.
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