SEOUL: South Korean battery manufacturer Samsung SDI (006400.KS) is reducing the price of new shares by 14 per cent, that it will offer to generate 2 trillion won ($1.4 billion), as the global market downturn caused by concerns over U.S. tariffs affects corporate transactions throughout Asia. On Wednesday, Samsung SDI announced its intention to offer new shares at 146,200 Korean won ($98.41) each, a decrease from the 169,200 won stated last month. The ultimate price will be determined on May 19. An increasing number of transactions are being influenced by the fluctuations affecting worldwide markets following U.S. President Donald Trump's tariffs package.
The "reciprocal" tariffs on many countries began on Wednesday, featuring 104 per cent duties on goods from China. On Tuesday, China stated it would 'struggle to the end' against the suggested tariffs. The tariffs have caused chaos in global equity and bond markets as investors worried that a worldwide economic decline was near. Asian equity markets decreased once more on Wednesday, as MSCI's widest index of Asia-Pacific shares excluding Japan fell by 2 per cent. The 10-year U.S. Treasury yield, regarded as the world's standard safe-haven asset, increased by 20 basis points and was climbing in Asia, indicating that investors were offloading even their most secure holdings.
Samsung SDI Cuts Share Price
On Wednesday, the South Korean won fell to its lowest point in over 16 years. In March, Samsung SDI announced it would release 11,821,000 new shares to generate capital for a U.S. joint venture with General Motors (GM.N) and to enhance factory capacity in Hungary, among other investments. It was the most recent company in Asia to change its fundraising strategy due to the market upheaval. Three Japanese firms, Suntory Holdings, Asahi (2502.T), the largest beer producer in Japan, and Nissin (9066.T), have delayed bond arrangements this week to gather as much as 100 billion yen ($688.80 million), as reported by Reuters on Tuesday referencing company representatives and a source.
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The outlook for IPOs and bond offerings in Asia is under careful observation as transactions fail or are postponed globally. Even Berkshire Hathaway, which is currently offering a seven-tranche yen-denominated bond, adjusted its pricing guidance about 5 basis points wider for each tranche, based on a term sheet reviewed by Reuters, indicating that investors seek improved returns to participate in the deal. The transaction books are set to close on Thursday in the Asian time zone. Berkshire Hathaway did not reply to a request for comment made by Reuters beyond typical U.S. business hours. Indian electric vehicle manufacturer Ather Energy is contemplating reducing its $400 million IPO by $50 million due to unpredictable market conditions, Bloomberg News reported on Wednesday, referencing sources.
($1 = 145.1800 yen)
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