Korea Zinc Prioritizes KRW 1.5 Trillion of Equity Capital for Treasury Stock Tender Offer

2.7 Trillion Won in Tender Offer Funds, 1.2 Trillion Won Borrowed
Additionally, 1.5 Trillion Won Cash Reserves Secured

Korea Zinc has launched a public tender offer for treasury shares worth approximately 2.7 trillion KRW, of which 1.5 trillion KRW is funded from internal resources.

According to the tender offer report submitted by Korea Zinc to the Financial Supervisory Service on the 4th, a total of 2.6635 trillion KRW will be invested in the repurchase of treasury shares. Of this amount, 1.5 trillion KRW will come from the company’s own cash reserves, while the remaining 1.1635 trillion KRW will be covered by emergency loans secured from banks.

The borrowed funds are part of a 1.7 trillion KRW credit line established with Hana Bank and SC First Bank. Korea Zinc obtained loans from Hana Bank and SC First Bank that can be freely used within the credit limit for up to one year from the initial drawdown date. The terms include a minimum fixed interest rate of 5.5% and an initial variable interest rate of 4.67%. Even after this treasury share repurchase, Korea Zinc still has the capacity to borrow an additional approximately 500 billion KRW.

Korea Zinc had previously announced plans to expand short-term borrowings by 2.7 trillion KRW, including issuing corporate bonds worth 1 trillion KRW. It is assessed that Korea Zinc has secured more than 1.5 trillion KRW in additional cash aside from this treasury share repurchase.

On the other hand, Yeongpung and MBK are reportedly considering raising their existing tender offer price of 750,000 KRW in response to Korea Zinc’s public tender offer. In this case, it is highly likely that Korea Zinc will also consider further increasing its current tender offer price of 830,000 KRW.

Meanwhile, Bain Capital, which is also participating in the tender offer alongside Korea Zinc (Troyka Drive Investment), will invest approximately 85.9 billion KRW of its own funds and borrow about 343.7 billion KRW from Korea Investment & Securities. The minimum fixed interest rate is 5.7%, with the borrowing date set for the 21st and a loan period of 9 months.