SEOUL: Shares in LG Electronics plunged early on Thursday amid market talk the world's No.3 handset maker was planning a rights offer worth some 1 trillion won ($891.4 million).
"There are rumours in the market LG Electronics is seeking a share issuance," said Kim Do-han, an analyst at Samsung Securities.
The rights offer is said to be worth around 1 trillion won ($891.5 million), another market source who declined to be named said.
The firm is planning a board meeting on the possible offer soon, according to media reports.
The Korea Exchange has asked LG to clarify the talk. An LG spokesman told Reuters he was looking into the rumours.
Shares in LG Electronics dropped 11 per cent to 63,300 won, the lowest level in five weeks, compared with the broader market's 1.1 per cent fall.
Market insiders said LG Electronics may be seeking to raise money to fund struggling affiliates such as LG Display
or a merger and acquisition deal. "LG Display, which has been posting losses, needs fresh facility investments and LG Electronics as the top shareholder may need to pitch in," said John Park, an analyst at Daishin Securities.
LG Electronics controls around 38 per cent of the world's No.2 flat panel maker, which posted a record quarterly loss last month.
LG Display was also recently the center of rights offer rumors, which a company executive flatly denied last month in a meeting with investors.
LG Elec may also be seeking to acquire new growth engines as some of its business lines struggle, Park said.
World No. 2 memory chip maker Hynix is among the firms mooted as possible LG Elec takeover targets.
LG Elec last week reported a wider-than-expected quarterly loss, with its troubled mobile phone division sinking deeper into the red.
VIVEK KUMAR
PGDM IIIrd Sem
"There are rumours in the market LG Electronics is seeking a share issuance," said Kim Do-han, an analyst at Samsung Securities.
The rights offer is said to be worth around 1 trillion won ($891.5 million), another market source who declined to be named said.
The firm is planning a board meeting on the possible offer soon, according to media reports.
The Korea Exchange has asked LG to clarify the talk. An LG spokesman told Reuters he was looking into the rumours.
Shares in LG Electronics dropped 11 per cent to 63,300 won, the lowest level in five weeks, compared with the broader market's 1.1 per cent fall.
Market insiders said LG Electronics may be seeking to raise money to fund struggling affiliates such as LG Display
or a merger and acquisition deal. "LG Display, which has been posting losses, needs fresh facility investments and LG Electronics as the top shareholder may need to pitch in," said John Park, an analyst at Daishin Securities.
LG Electronics controls around 38 per cent of the world's No.2 flat panel maker, which posted a record quarterly loss last month.
LG Display was also recently the center of rights offer rumors, which a company executive flatly denied last month in a meeting with investors.
LG Elec may also be seeking to acquire new growth engines as some of its business lines struggle, Park said.
World No. 2 memory chip maker Hynix is among the firms mooted as possible LG Elec takeover targets.
LG Elec last week reported a wider-than-expected quarterly loss, with its troubled mobile phone division sinking deeper into the red.
VIVEK KUMAR
PGDM IIIrd Sem
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