Hyundai Heavy Industries Co. will pursue a rights offering worth 1.29 trillion won ($1.2 billion) in March to strengthen shipbuilding capacity and research and development, while its non-shipbuilding sector will separately reinforce its balance sheet through initial public offering of its lucrative gasoline retailer Hyundai Oilbank Co.

South Korea’s largest shipbuilding conglomerate said on Tuesday it will offer 12.5 million new shares estimated at 1.29 trillion won in coming March. The proceeds would be used to improve its finances and invest in research and development.

The recapitalization would enable Hyundai Heavy Industries and its two shipbuilding affiliates Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co. to become debt-lean and sit on a net cash reserve of 500 billion won.

Concerns about dilution through the burden of 12.5 million added shares sent the stock price of Hyundai Heavy Industries down by nearly the 30-percent daily limit of 29 percent to 97,000 won as of 1:00 p.m. Wednesday in Seoul trading.

The conglomerate has split its business to core shipbuilding and non-shipbuilding divisions as part of restructuring efforts to better respond to the cyclical global slump and prepare for new growth as well as improve management efficiency and transparency.

On the non-shipbuilding front, Hyundai Robotics, which acts as the holding entity, in a board meeting gave a go-ahead for an IPO of Hyundai Oilbank in the second half of next year. Given the value of the other three refining majors, the IPO is expected to fetch billions of dollars. Hyundai Robotics owns 91.1 percent of the oil refining and distributing unit.

At 1:00 p.m., shares of Hyundai Robotics were down 4 percent at 359,500 won.

By Woo Je-yoon and Kim Hyo-jin

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