POSCO unit, S.Korea leasing firm win IPO approval

SEOUL, July 11 (Reuters) - The construction arm of steel giant POSCO Co Ltd (005490.KS) and a local leasing company have got the nod for initial public offerings in Seoul that will raise up to $1.48 billion in total, the Korea Exchange said on Friday.

POSCO Engineering & Construction, 89.5 percent owned by the world's fourth-largest steel maker, is aiming to launch an IPO in September, offering 26 percent of its enlarged capital, the exchange said in a statement.

The builder, based in the southeastern port city of Pohang, will issue 4.26 million new shares to the public and POSCO will sell another 4.73 million existing shares in the firm, at between 100,000 won ($100.2) and 130,000 won apiece.

The indicative range would allow the company, ranked sixth nationwide in terms of construction capacity, to raise between 898.7 billion won and 1.17 trillion won, valuing it at up to 4.5 trillion won.

For the steelmaker, which is set to report quarterly results later in the day, the offering would entail 615 billion won in new cash.

POSCO Engineering posted a 205.8 billion won net profit last year, or 6,862 won a share. Merrill Lynch MER.N and Daewoo Securities (006800.KS) will handle the IPO.

In addition Daewoo Capital, an automobile instalment-financing and leasing company, will offer 27 percent of its equity in a public offering at between 16,000 and 18,500 won a share. That would raise a maximum 307.1 billion won, the statement said.

The consumer finance company is 82.9 percent owned by unlisted construction material provider Aju Corporation and its affiliate. It earned a 16.3 billion won net profit in the first quarter of this year, or 317 won per share, with assets of 4.3 trillion won.

Daewoo Capital has no timeframe for its IPO, which will be managed by Korea Investment & Securities.

The prospective offerings by the two companies would raise up to 1.48 trillion won, giving a much-needed boost to sluggish IPO markets.

About 35 companies in Asia-Pacific excluding Japan have withdrawn plans to raise around $20 billion from IPOs this year as of last week, according to Thomson Reuters data.

SK C&C, the technology outsourcing arm of South Korean conglomerate SK Group, delayed a July IPO worth up to 1.2 trillion won due to unfavourable stock market conditions.

Lotte Engineering & Construction, a medium-sized builder competing with POSCO Engineering, also won approval for a Seoul IPO last month, but the company said it has yet to set a date for the offering.

The construction industry has been hit by a rising number of unsold new houses because of heavy taxes on property transactions and tightened mortgage lending.

MSCI's index for Asia-Pacific shares .MIAPJ0000PUS outside Japan has lost 22 percent since the start of this year on concerns over high inflation and a global economic slowdown due to surging oil prices and a credit crunch.

Seoul shares also shed 19 percent over the same period. ($1=998.5 Won)

(Reporting by Kim Yeon-hee; Editing by Jonathan Hopfner)