Korea Zinc Is Committed to Protecting the Nation's Key Industry Corporation Through Successful Proceedings of the EGM
Korea Zinc Is Committed to Protecting the Nation's Key Industry Corporation Through Successful Proceedings of the EGM |
| [22-January-2025] |
SEOUL, South Korea, Jan. 22, 2025 /PRNewswire/ -- With the Korea Zinc (KRX:010130) extraordinary general meeting (EGM) just a day away, the management of Korea Zinc, along with all employees from the headquarters and subsidiaries, expressed their hope that successful proceedings of the meeting would safeguard Korea Zinc, a key pillar of the nation's key industry. They also expressed their commitment to prevent the overseas transfer of a national core technology, national high-tech strategic technology and national strategic technology.
Sun Metals Corporation Pty. Ltd. (SMC), Korea Zinc's "grandchild company" or second-tier subsidiary, announced today (January 22) that it has acquired a portion of Young Poong's shares held by the Choi family and Young Poong Precision Corporation. SMC explained that the acquisition was based on a rationale of stable business operations and a reasonable price. The number of shares acquired by SMC is 190,226, accounting for 10.3% of Young Poong's total issued shares of 1,842,040 shares. The transaction is valued at KRW 57.5 billion. SMC stated that it acquired Young Poong Precision's shares at the closing price on the 21st. Moreover, SMC acquired shares held by the Choi family at a price discounted by 30% from the January 21 closing price. This indicates that, while SMC has benefitted significantly from a price standpoint, the Choi family has given up on a substantial portion of the potential profits they could have gained from the sale. SMC's acquisition of the Young Poong shares has legal validity under the Commercial Act. Accordingly, voting rights regulations will be newly applied, and the EGM will proceed in compliance with these regulations. According to Article 369 (3) of the Commercial Act, when a company, its parent company and its subsidiary company, or its subsidiary company alone, holds more than one tenth of the total number of issued shares of another company, the shares of a company or its parent company owned by the other company have no voting rights. As Korea Zinc's grandchild company, SMC is classified as a subsidiary under Article 342-2(3) of the Commercial Act. Under this article, if a parent company and its subsidiary company, or a subsidiary company alone, holds more than half of the total number of issued and outstanding shares in another company, such company is deemed a subsidiary company of the parent company. Over the past five months, Korea Zinc's current management, core technical team, labor unions and employees have made unwavering efforts to safeguard the company. It was amidst this endeavor that Young Poong Precision and the Choi family stepped up to contribute their support. In a statement, they expressed that, "After a careful deliberation, we have concluded that this decision represents the best course of action for the South Korean economy, the diversification of supply chains away from China and the local communities, including Ulsan. This decision was also made after considering how Korea Zinc, as a national key industry business, could contribute to the nation's economy and what would be the right choice to enhance its long-term corporate and shareholder values." Korea Zinc's current management and employees have reaffirmed their commitment to go beyond being the world's number one company in non-ferrous metals by making a meaningful contribution to the nation's economy as a leading energy materials company. This will be achieved through successfully driving the secondary battery materials, renewable energy and resource recycling business. Through these efforts, they aim to transform the company into a true "national enterprise" equipped with a national core technology, national high-tech strategic technology and national strategic technology. The current management of Korea Zinc also stated that they are open to any discussions or negotiations with MBK Partners if it aligns with the direction of growth and development for Korea Zinc. They believe that coexistence, cooperation and achieving a great compromise are the best path forward for everyone involved. The company also emphasized its willingness to keep all options open and engage in dialogue at any time and has called for the cooperation and support of various stakeholders in reaching this goal. Korea Zinc's current management and employees believe that if MBK Partners can build mutual trust as a reputable and prestigious private equity firm capable of collaborating for the benefit of Korea Zinc, it could become a valuable partner in the company's journey toward becoming a national enterprise. Meanwhile, Korea Zinc plans to use the upcoming EGM as an opportunity to enhance shareholder value and improve corporate governance. Key measures include adopting a cumulative voting system, setting a cap on the number of directors, implementing a stock split and introducing an executive officer system. These initiatives aim to establish a foundation for the company's long-term growth and development.
SOURCE Korea Zinc | ||
Company Codes: Korea:010130 |
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