LG Electronics plans to raise KRW 1.06 trillion (USD 938 million) in a rights issue. The company plans to sell 19 million new shares at KRW 55,900 apiece, a discount to the 3 November closing price of KRW 61,600, Bloomberg reports from Seoul. The shares first will be offered to existing holders from 20-21 December, and any unsubscribed portion will be sold in a public offering. LG Electronics, whose handset unit has lost money for six straight quarters, said it will use the proceeds to strengthen its core businesses including smartphones. LG Electronics will spend KRW 638.6 billion for capital expenditure and the remainder will be used for research and development, the company said, without providing further details. The company's share ended down 14 percent after the announcement. Fitch Ratings earlier lowered the outlook on LG Electronics to "negative" from "stable," saying the company's operational competitiveness is unlikely to recover in the short term. Last month, Moody's cut the outlook for LG's rating to "negative" from "stable", and Standard & Poor's lowered the long-term corporate credit and senior unsecured debt ratings to BBB- from BBB.
