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Hyundai Rotem Prices IPO at Top End After Deal 58 Times Covered

Hyundai Rotem Co., a unit of Hyundai Motor Co. (005380), priced its shares at the top end of its marketing range after its initial public offering, South Korea’s biggest in three years, was 57 times oversubscribed.

The nation’s biggest rail-car maker expects to raise 622.4 billion ($587 million) after pricing its shares at 23,000 won, Hyundai Rotem said in a regulatory filing today. The IPO is South Korea’s largest since Samsung Life Insurance Co.’s 4.89 trillion-won deal in 2010, data compiled by Bloomberg show.

The shares, which are scheduled to debut on the Korea Exchange around Oct. 30, will help Hyundai Rotem “drastically reform” the company’s financial structure by repaying debt and investing in expansions to “become a global player” in the rail-car and machinery industries, Chief Financial Officer Kim Young Gon said at a press conference in Oct. 16.

The Hyundai Motor Group affiliate, founded in 1977, also makes armored vehicles including tanks, along with plants, presses and steel-making facilities, according to its website. Hyundai Motor Co., South Korea’s largest automaker, owns 58 percent of Rotem’s shares, according to a regulatory filing in April. A private equity fund affiliate of Morgan Stanley (MS) owns the remaining shares, the filing shows.

The deal was 58 times covered after 409 financial institutions, including 211 from overseas, applied for shares, the company said in an e-mailed statement today. The shares were marketed in a range from 17,000 won to 23,000 won each.

Daewoo Securities Co. (006800), Woori Investment & Securities Co. (005940), Bank of America Merrill Lynch and Deutsche Bank AG are arranging the sale, Seoul-based Hyundai Rotem said.

To contact the reporter on this story: Rose Kim in Seoul at rkim76@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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