[Alpha Biz=(Chicago) Reporter Kim Jisun] Hyundai Engineering & Construction Co., South Korea's second-largest construction company, will start raising funds.

The credit rating agency sees the 5 trillion won worth of unpaid construction at home and abroad as a risk factor and plans to focus on monitoring claims and recovery of funds.

According to the Financial Supervisory Service's electronic disclosure system on the 24th, Hyundai Engineering & Construction will make a demand forecast for the issuance of 120 billion won worth of corporate bonds on the 28th. Depending on the result, it can be increased up to 240 billion won. By tranche, it is two years (60 billion won) and three years (60 billion won). The Hope Band was presented as ±30bp compared to individual public evaluation.

The financing will be used in full for debt payments. Hyundai Engineering & Construction is set to mature its corporate bonds of 200 billion won next month and 50 billion won in November. In February, about 170 billion won of corporate bonds were issued and used for refinancing.

Hyundai Engineering & Construction received a credit rating of 'AA-· Stability' from the Korea Enterprise Evaluation and Korea Credit Rating on the 23rd. It was noted that sales in the first half of this year were KRW 7.2 trillion, up 34.6% from a year earlier. It is said that the company continued to grow outward based on construction performance in domestic housing and overseas plant sectors.

Hyundai Engineering & Construction has a backlog of 95.3 trillion won, about four times its annual construction sales, recording 20.7 trillion won in new orders, including the Saudi Amiral project (6.6 trillion won) in the first half of this year.

The operating profit ratio fell 0.8 percentage point year-on-year to 2.7 percent. This is due to a 95% increase in sales costs due to the rise in cement and additional raw materials and the occurrence of one-off costs at some housing sites.

 

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