S.Korea's Hyundai Engineering postpones planned IPO, cites valuation problems

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Employees of Hyundai Group walk behind the company's logo at its headquarters in Seoul December 7, 2010. REUTERS/Jo Yong-Hak

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SEOUL, Jan 28 (Reuters) - South Korean builder Hyundai Engineering Co Ltd, an affiliate of Hyundai Motor Group, said on Friday it has decided to postpone an upcoming initial public offering (IPO) which had been expected to raise as much as $1 billion.

Pricing had been expected to be finalised in late January, with a listing in Seoul expected in February. The company didn't indicate when a listing might now take place.

In a regulatory filing on Friday, Hyundai Engineering cited difficulty receiving a proper assessment of the company's value during institutional bookbuilding this month as one factor in the postponement. It did not specify other factors.

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In December the company, ranked among South Korea's top seven construction firms, said it aimed to raise up to 1.2 trillion won, with an indicative price range of 57,900 to 75,700 won per share.

The offer was to consist of 4 million new shares, plus 12 million existing shares from Hyundai Engineering's shareholders, Hyundai Motor Group Chairman Euisun Chung, Honorary Chairman Mong-Koo Chung, Hyundai Glovis (086280.KS), Kia Corp (000270.KS) and Hyundai Mobis . read more

Analysts said sentiment toward the construction industry in general has been hit after a deadly wall collapse at a different builder's work site in Korea earlier this month, raising cost concerns.

"We see the domestic construction industry shouldering a heavier burden in overall safety management costs after the collapse. This is why investor sentiment has soured on construction companies," said Kang Kyung-tae, analyst at Korea Investment & Securities.

"The rapidly changing (overall) market situation in January, involving liquidity taking flight from certain markets, also had an effect."

($1 = 1,205.0800 won)

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Reporting by Heekyong Yang and Joyce Lee; Editing by Jacqueline Wong and Kenneth Maxwell

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