OCI to be listed on Singapore bourse

By Kim Yoo-chul

OCI, the world’s second-biggest polysilicon manufacturer, Wednesday confirmed its plan to be listed on the Singapore stock exchange later this month.

The plan comes after the Korean polysilicon giant has completed the sale of $700 million-equivalent global depositary receipts (GDR) to overseas investors such as those in the U.S., the U.K. and Hong Kong.

Ten GDRs represent one ordinary share.

``Despite uncertainties in emerging markets, big overseas investors were flocking to the cash-raising campaign as they believe in OCI’s competitiveness in polysilicons and growth potential,’’ said Park Sang-bae, an OCI spokesman.

The campaign is the biggest case of a South Korean firm since 2002 to raise cash through an overseas stock exchange. Park from OCI said the discount rate of 2.7 percent was ``unexpectedly favorable’’ in terms of conditions.

The cash secured by the GDR issuance will be used to boost its production capacity in its local facilities and help its flexibility in responding to long-term investment.

The current capacity of OCI’s polysilicons is 27,000 tons and it aims to become the world’s biggest polysilicon maker from late 2012 because the completion of its fourth plant in South Korea will boost the annual production capacity to 62,000 tons, it said in the release.

``OCI is expected to receive an additional 60 billion in profit throughout the issuance, which is quite impressive,’’ said Song Joon-deok, an analyst at Samsung Securities, a leading local brokerage, in a memo to clients.

OCI, which also produces specialty chemical products used in green energy markets such as solar power and LED industries, sold 14.88 million global depository shares at 510,000 won per OCI common share listed on the Korean stock exchange.

Barclays Capital, Credit Suisse and RBS are joint bookrunners while Citi is the depositary bank. OCI is investing up to $1.7 billion to build its Phase 4 polysilicon plant.

But concerns have been raised that spot prices of the material used to make solar cells will fall, hurting OCI’s profitability.

``While concerns about the price outlook is cited as the main reason to hamper OCI’s stock moves, most of OCI’s sales were made through mid- to long-term contracts,’’ said the brokerage.