SEOUL Nov 9 South Korean cable television group
CJ Hellovision fell more than 4 percent on its
market debut on Friday, underscoring weak demand for new
offerings during a sluggish year for local IPOs.
Despite pricing South Korea's largest IPO in almost 18
months near the bottom of an indicative range at 16,000 won, the
country's biggest cable television operator sagged to 15,300 won
at the start of trading.
The company raised $267 million through the offer of 18.3
million shares, but its disappointing start was expected after
it failed to win over retail investors.
Only about 26 percent of the 3.7 million shares allocated to
retail investors had found buyers by end of a two-day
subscription period on November 1.
"Not only is it difficult for retail investors to understand
the industry dynamics of [cable TV operation], but retail
investors' participation had already been dwindling due to
market conditions," said Gene Park, media sector analyst at
Woori Investment & Securities.
He said low retail subscription appeared to have hurt
institutional investors' sentiment as well.
Predictions of a poor start for CJ Hellovision appear to
have also pressured at least one smaller local offering to
adjust its pricing.
Car parts maker GMB Korea Corp on Tuesday priced its $31
million IPO at 6,000 won per share, 17 percent below the bottom
end of the 7,600-9,200 won indicative range.
However, among imminent larger offerings, POSCO Specialty
Steel was currently going ahead as planned, without reducing the
number of shares offered or postponing its offering, a company
official said on Wednesday.
POSCO Specialty Steel is planning an up to $424 million
offering, which is expected to be priced after the bookbuild
ends on Nov. 29.
Two companies reviewing larger offerings, Hyundai Rotem and
SK Lubricants, have picked advisors but do not yet have a set
timetable for an offering, spokesmen for the two companies said.
CJ Hellovision's weak start comes toward the end of a slow
year for IPOs in South Korea, with companies raising just $827
million so far in 2012, compared with $2.3 billion last year.
CJ Hellovision is controlled by South Korean conglomerate CJ
Group through its CJ O Shopping unit.
JPMorgan was global coordinator for the offer, with
Daewoo Securities and HI Securities also acting as
(Additional reporting by Elzio Barreto; Editing by Richard