LG\'s credit rating unaffected by new share sales

The global credit rater Standard & Poor\'s said Friday that the credit rating on LG Electronics would not be affected by its plan to sell new shares. \"Ratings on LG Electronics would be not affected by a capital increase. The company\'s financial standing is expected to mildly benefit from the rights offering, if the deal goes through,\" S&P said in an e-mailed statement. The rater noted that the key rating driver for the tech firm remained its ability to improve operating performance over the next several quarters. The world\'s third-largest mobile phone maker said Thursday that it would raise 1.06 trillion won (940 million U.S. dollars) in capital through a rights offering in a bid to secure funds to invest in key businesses, including smartphones. The 19 million new shares would be sold at 55,900 won per share, a discount to Friday\'s closing price of 61,100 won. The shares would be offered to existing holders from Dec. 20 to Dec. 21 before forfeited stocks would be sold in a public offering. The new equities were scheduled to be listed on the main bourse on Jan. 9. S&P downgraded last month the long-term corporate credit rating on LG Electronics by one notch to BBB-minus, citing operating underperformance in handset and display panel units. Moody\'s also revised down the outlook for the company\'s Baa2 issuer rating to negative from stable. LG has suffered from weak earnings for a long time due to late response to the smartphone boom and soft demand for TVs globally. The handset unit posted operating losses since the second quarter of 2010, and the liquid-crystal-display business recorded losses since the fourth quarter of last year.