South Korea’s Samsung Heavy Industries Co. share prices crashed nearly 30 percent Wednesday to a year-low as investors dumped their holdings in fear of dilution and further losses after the cash-strapped shipbuilder announced it will offer up to 1.5 trillion won ($1.4 billion) rights offering, estimating its losses will stretch to over 700 billion won by next year.

“We will pursue rights offering of around 1.5 trillion won as pre-emptive actions against liquidity squeeze and other financial risks,” the company said in a disclosure.

At 1:45 p.m. shares were down 28 percent at 9,120 won by going down to as low as 9,000 won, a level last touched on Dec. 9 last year.

The company warned investors that it estimated operating loss to reach 490 billion won on sales of 7.9 trillion won this year and another loss of 240 billion won on sales of 5.1 trillion won in 2018.

It cited fixed cost burden from failure in downsizing plans on top of higher sales cost, loss reserves for some orders obtained in 2017, and compensations for laid-off employees and spike in steel prices as reasons for its widening red figures in the bottom line.

The country’s third largest dockyard said it was able to win just $500 million orders last year, just 10 percent of its targeted $5.3 billion worth, due to global slump. It has been rationalizing organization and workforce to save cost.

It vowed that it will return to the black from 2019, given the recovery in global demand.

The company will issue the rights to existing shareholders and put up the forfeited shares in public offering. It hopes to complete recapitalization process by early 2018.

Further details of the rights offering will be disclosed later after the plan is approved by the board of directors, the company said.

By Woo Je-yoon and Lee Ha-yeon

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