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

Nov 03, 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: Apple set to shut down Beats music service: report

add to favorites email to friend print save as pdf

Related Stories

Moody's downgrades LG's outlook to negative

Oct 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

Jul 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

Jul 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

Sep 08, 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

Investors fret Yahoo's future, stock dips

22 minutes ago

Yahoo's stock fell Monday as investors grappled with uncertainty about the Internet company's future in the wake of last week's record-setting Wall Street debut by the Chinese e-commerce giant Alibaba.

Line says no IPO this year

8 hours ago

The Japan-based operator of popular mobile messaging app Line said Monday it has decided not to go ahead with an initial public offering in Japan or overseas this year.

User comments : 0