LG Electronics Inc., the world's No. 3 cellphone maker, said Thursday it plans to issue new shares worth 1.06 trillion won ($938 million) to raise capital for investments in its struggling mobile division and other core businesses.
"Through the new share sales, LG aims to continue investing in smartphone and other key businesses and to revive its market leadership," the company said in a press release.
LG will sell 19 million new stocks at 55,900 won per share, which will be listed on the bourse on January 9, it said.
The statement came at the request of the Seoul stock exchange operator following media reports that claimed the company may issue new shares. The Wall Street Journal and Bloomberg reported later that the company would float new stocks worth at least 1 trillion won.
The reports sent shares of LG Electronics and its affiliates into a tailspin. LG Electronics nose-dived 13.73 percent to 61,600 won, with its panel making affiliate LG Display Co. sinking 6.32 percent to 21,500 won.
LG Electronics posted a net loss of 413.9 billion won in the July-September period as it failed to turn around its mobile business that stayed in the red for the six straight quarters.
Its belated introduction of high-end smartphone models caused the loss of market shares around the world. Global credit rating agencies recently downgraded their outlook citing the company's weak mobile business sector.
A slow improvement in its panel-making unit added pressure on LG Electronics, which is the world's second-biggest TV maker after Samsung Electronics Co.
LG Display, the world's No.2 liquid crystal display (LCD) panel maker and a key supplier to Apple Inc., reported a record-high operating loss for the third quarter, as declines in panel prices persisted amid fragile TV demand in developed markets. (Yonhap)