Bain Capital Moves to Acquire 18% Treasury Shares
"Will Cancel All Treasury Shares to Enhance Shareholder Value"
Chairman Choi Shows Gesture of Reconciliation to Yeongpung
"Will Help Normalize Seokpo Smelter Operations"
Korea Zinc has launched a counterattack with a tender offer for its own shares in response to the management rights acquisition attempt by Youngpoong and MBK Partners. Choi Yoon-beom, Chairman of Korea Zinc, personally explained the background of this tender offer, saying, "It is a decision made to resolve the uncertainty about the company's vision and future."
At a press conference held on the 2nd at the Grand Hyatt Hotel in Yongsan-gu, Seoul, Chairman Choi said, "This is the result of extensive deliberation and discussion by the Korea Zinc board of directors and management regarding the current situation and the direction the company should take," adding, "This decision is a sincere and earnest one made to protect the company, shareholders, employees, partner companies, and to dispel the concerns of the local community and the public."
On the 2nd, Korea Zinc held a board meeting and resolved to proceed with a tender offer for treasury shares worth approximately KRW 2.7 trillion. The number of shares to be acquired through the tender offer corresponds to 3,209,009 shares, which is 15.5% of Korea Zinc's total issued shares, at a purchase price of KRW 830,000 per share. The treasury shares acquired through the tender offer will be entirely canceled to enhance shareholder value.
Chairman Choi Yoon-beom of Korea Zinc is speaking about the management rights dispute at a press conference held on the afternoon of the 2nd at the Grand Hyatt Hotel in Yongsan-gu, Seoul. [Photo by Lee Sung-min]
Global private equity firm Bain Capital will also participate as a co-buyer in this tender offer for Korea Zinc. Bain Capital will not be involved in Korea Zinc's management or board of directors. It plans to invest about KRW 430 billion to acquire 517,582 shares, equivalent to 2.5% of Korea Zinc's issued shares.
Chairman Choi explained, "Bain Capital is a purely financial investor who has expressed strong trust and active support for the future business directions, such as the Troika Drive, being pursued by Korea Zinc's current management."
He also stated that the treasury shares acquired this time will be entirely canceled through proper legal procedures in the future to increase shareholder value. Chairman Choi said, "This decision was made to swiftly resolve the confusion in the capital market caused by the recent situation and the uncertainty about the company's vision and future," adding, "We will also promote Korea Zinc's long-term growth through a 'value-up' strategy that aligns with the government's policies aimed at enhancing corporate value."
Regarding the renewed injunction application by MBK Partners and Youngpoong to prohibit the purchase of treasury shares, he warned, "It is an act that ignores the court's decision and causes market confusion with false claims." He emphasized, "Someone has been deliberately spreading numerous falsehoods, such as claims that acquiring treasury shares constitutes breach of trust, that the distributable profits for treasury share acquisition amount to KRW 58.6 billion, or that acquiring treasury shares amounts to market manipulation. All these claims were already raised during the court trial but were not recognized by the court and are fictitious."
He continued, "In the future, countless falsehoods criticizing or disparaging the company and its tender offer will likely be spread, but shareholders and investors are urged not to be misled and to trust the information disclosed by the company."
He extended a hand to Youngpoong, urging cooperation to prevent Korea Zinc, the world's No. 1 non-ferrous smelting company, from falling into foreign hands. Chairman Choi said, "The immediate task facing Youngpoong is to restore the normal operation of the Seokpo Smelter to resolve safety issues and to normalize the abnormal management where all CEOs have been detained," adding, "Instead of joining MBK's hostile M&A and selling Korea Zinc shares to MBK at a low price, I believe it is necessary to prioritize management normalization, including improvements at the Seokpo Smelter, using Korea Zinc shares as investment resources."
He added, "If Youngpoong wishes, we are ready to help resolve the current issues at the Seokpo Smelter," and said, "The management cooperation agreement between MBK and Youngpoong should be promptly dissolved or its execution prohibited to prevent MBK from acquiring Youngpoong's Korea Zinc shares at a low price through unclear procedures and conditions that MBK itself cannot disclose."
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