Maeil Business news has reported that LG Electronics plans to issue new stocks worth 1 trillion won ($890 million) in order to raise capital to continue growing in the IT sector. Reeling from the recent string of losses, the company has no other choice but to attract external capital to make the necessary upgrades, say experts.
As rumors spread on the recapitalization plan, stock prices fell not only for LG Electronics, but across the board for the entire Group. The market capitalization value of LG group plunged 4.38 trillion won overnight.
However, this plan was not induced by cash or liquidity crunches; it is chiefly intended to attract funds for new investments. The company’s finances are still sound, there is no evidence to warrant concerns regarding its fiscal soundness or imbalances.
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