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Korea Zinc to issue new shares in ongoing takeover battle with Young Poong

Published: 30 Oct. 2024, 18:10

Korea Zinc held an emergency board meeting on Wednesday. [YONHAP]

Korea Zinc said Wednesday it will issue new shares in its stepped-up efforts to fend off a takeover attempt by a coalition of its biggest shareholder and a private equity firm.

The zinc smelter plans to issue 3,732,650 shares to raise 2.5 trillion won ($1.8 billion) at an estimated 670,000 apiece, with the subscriptions scheduled on Dec. 3 and 4, the company said in a regulatory filing.

Korea Zinc said it will assign 20 percent of the new shares for subscriptions by employees on Dec. 3.

The final price will be fixed days before the subscriptions begin, it said in a statement.

"The planned rights issue is aimed at preventing further volatility in the stock price amid an intensifying battle over the control of Korea Zinc with Young Poong and MBK Partners," it said.

The share sale is also to avoid the possible designation of the world's biggest refined zinc smelter as an issue of concern at the Korea Exchange and involuntary delisting from the main bourse, the statement added.

But the move is widely seen as part of Korea Zinc's efforts to secure more treasury stocks with voting rights in the battle with the Young Poong camp.

Currently, the Young Poong side owns a 38.47 percent stake in Korea Zinc following a tender offer, while the smelter's chairman, Choi Yun-beom, and related parties collectively hold 35.4 percent after a buyback.

Shares in Korea Zinc plunged by the daily limit of 30 percent to 1,081,000 won as of 2:35 p.m., far underperforming the broader Korea Composite Stock Price Index's 1.1 percent loss.

Yonhap