Shares of Fila Korea Ltd., a sportswear maker based in South Korea, rose sharply in their market debut Tuesday as investors were heartened by expectations of the company's robust growth.
Shares of Fila Korea closed at 68,700 won (US$59.90) on the main stock board, almost double their initial public offering (IPO) price of 35,000 won.
First established as a local distributor of Fila Global Group in 1997, the sportswear maker clinched the exclusive license of the Fila brand after acquiring in 2007 Brands International, a holding company owned by U.S. hedge fund Cerberus Capital Management.
The company raised 113.75 billion won earlier this month by selling 3.25 million new and existing shares via an IPO. The money will be spent to repay debts, Fila Korea said.
Market analysts issued upbeat prospects for Fila Korea's future trading, citing its broadening domestic market share as well as potential growth in overseas sales.
"Through the launch of a new outdoor brand and boosting its existing footwear division, the company could possibly get close to the No. 1 spot in the local market, now taken by Nike Inc.," Daishin Securities Co. said in a note to investors.
Fila Korea's loss-making U.S. unit is expected to swing to the black in the second half of this year while its joint venture in China has warmed up to aggressively tap the fast-growing Chinese sportswear market, the securities firm said.
"Fila has a high brand value ... and the upcoming debt repayment with the IPO proceeds will add to its financial stability," Shinhan Investment & Securities Co. said in a report.
Fila Korea attracted prospective buying orders for 214 million shares in the IPO in earlier this month, almost 330 times the 650,000 shares the company earmarked for retail investors in the first share offering, according to the firm's regulatory filing.
Fila Korea's share offering comes amid a sharp rise in IPO activities. According to the financial watchdog, the Financial Supervisory Service, local firms raised 3.18 trillion won through IPOs in the January-August period this year, nearly quadrupling from 838.1 billion won posted in the eight months last year.
[English News Team]
reporter
Park Sae-jin
swatchsjp@ajunews.com