S. Korea's LG to raise $884 mln in rights issue

November 3, 2011

LG Electronics, the world's third-largest handset maker, said Thursday it would raise about one trillion won ($884 million) through a rights offer to strengthen its troubled smartphone business.

The company said its board has approved a plan to issue 19 million new common shares, which will be listed on the bourse on January 9.

"The rights offer is intended to secure stable financial resources for investment to strengthen our key business," it said in a statement.

LG, the world's second biggest liquid crystal display TV maker after Samsung Electronics, said some of the proceeds would be funnelled into its smartphone business.

The company is battling to turn around its loss-making handset operations, where it lags Samsung and Apple in offering high-end smartphones packed with features.

Last week it reported a net loss of 414 billion won in the third quarter.

International credit rating agencies have downgraded their outlook on LG. Standard and Poor's last month cut its long-term corporate credit rating on LG Electronics by one notch, citing weak profitability.

Moody's lowered its outlook on the firm's Baa2 issuer and senior unsecured debt ratings to negative from stable.

On Tuesday Fitch owered its outlook on LG to negative from stable, citing weak operating results and expectations of poor demand in key US and European markets.

Shares of LG-related shares tumbled amid speculation about the rights offer. LG Electronics nosedived 13.7 percent to 61,600 won and its flat-panel affiliate LG Display fell 6.3 percent to 21,500 won.

Explore further: S. Korea's LG unveils ultra-high-speed smartphone

Related Stories

Moody's downgrades LG's outlook to negative

October 13, 2011

Credit ratings agency Moody's on Thursday downgraded its outlook on South Korea's LG Electronics to negative, saying its position in the mobile phone business has weakened considerably.

Samsung says 5 mn new-model Galaxy handsets sold

July 27, 2011

South Korea's Samsung Electronics, the world's second-largest mobile phone maker, said Wednesday it had sold five million Galaxy S II smartphones worldwide since the device debuted in April.

LG Electronics 2Q net profit plunges, sales fall

July 27, 2011

(AP) -- LG Electronics, a top global manufacturer of mobile phones and flat-screen TVs, said second-quarter net profit plunged as sales declined and its mobile phone business remained in the red.

Report: Samsung, Microsoft tie up for new tablet

September 8, 2011

South Korea's Samsung Electronics has teamed up with Microsoft to make a new tablet computer powered by the US software giant's latest operating system, a report said Thursday.

Recommended for you

Microsoft aims at Apple with high-end PCs, 3D software

October 26, 2016

Microsoft launched a new consumer offensive Wednesday, unveiling a high-end computer that challenges the Apple iMac along with an updated Windows operating system that showcases three-dimensional content and "mixed reality."

Making it easier to collaborate on code

October 26, 2016

Git is an open-source system with a polarizing reputation among programmers. It's a powerful tool to help developers track changes to code, but many view it as prohibitively difficult to use.

Dutch unveil giant vacuum to clean outside air

October 25, 2016

Dutch inventors Tuesday unveiled what they called the world's first giant outside air vacuum cleaner—a large purifying system intended to filter out toxic tiny particles from the atmosphere surrounding the machine.


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.