SEOUL, KOREA - Korea's major securities firms are vying to take the job of underwriting the 600-billion-won capital increase for Korea Gas Corp. According to investment banking sources on June 2, the state-run KOGAS sent out requests for proposal to ten securities houses to select a principal underwriter for its recapitalization plan. This is the first time for KOGAS to go on a capital increase since 1999 when it publicly listed its shares.
The government, a 26.86-percent owner in the corporation, has decided to invest 200 billion won. Even though the planned capital increase volume is 600 billion won, it may change depending on whether other stakeholders including KEPCO (9.60%) and other local autonomous organizations would join in the capital increase.
It is highly likely that the securities companies will compete fiercely to get the deal by offering lowest-possible commissions, as the deal represents a major track record. An investment banker said, "Most candidate firms are willing to get the job by engaging in even dumping behavior."
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