MBK Targets Public Buyout Price of 890,000 Won "Will Incur 2.7 Trillion Won Debt"

Chairman Choi Yoon-beom's Side on Tender Offer Price Increase
"Concerns Over Increased Financial Burden on Korea Zinc" "Irreversible Negative Impact"
Requests Shareholders for a "Wise Decision"

Regarding the increase of the public tender offer price for Korea Zinc to 890,000 KRW by Chairman Choi Yoon-beom's side, the MBK Partners and Young Poong alliance stated, "A price competition above 830,000 KRW per share is a choice that burdens Korea Zinc's financial structure," and requested shareholders to make a wise decision.

[Image source=Yonhap News]

On the 11th, MBK issued a public statement titled 'The Position of Korea Zinc's Largest Shareholder on the Increase of the Public Tender Offer Price for Treasury Shares,' saying, "Once the public tender offer by MBK Partners and Young Poong is completed on October 14, regardless of the subscription quantity, MBK Partners will become the largest shareholder of Korea Zinc together with Young Poong," and added, "As announced on October 4, we have boldly removed the minimum quantity condition." According to MBK, even if only one share is subscribed in this tender offer, it will be completed, and according to the agreement with Young Poong, the two companies will directly or indirectly own half of the shares they hold.

MBK stated, "In the statement released on October 9, we declared that we would not increase the tender offer price any further," and argued, "A price competition above our current tender offer price of 830,000 KRW per share will burden Korea Zinc's financial structure, resulting in a decline in corporate and shareholder value and deterioration of global competitiveness." Despite conveying these concerns to Korea Zinc and its board members, on the 11th, Korea Zinc's board raised the tender offer price to 890,000 KRW per share. They said, "This decision by the board will have an irreversible and significant negative impact on Korea Zinc."

According to MBK, the increased tender offer amount of 3.2 trillion KRW by Korea Zinc's board corresponds to 97.1% of Korea Zinc's consolidated net profit over the past five years. It is a huge amount equivalent to 152.5% of the consolidated net profit over the past three years and 33% of equity capital. MBK claimed, "After all this is over, Korea Zinc will bear a debt of 2.7 trillion KRW," and "The company will gain nothing in return."

Furthermore, MBK plans to pursue all possible measures, including relief through ongoing litigation procedures, to prevent irreversible damage to Korea Zinc caused by the large-scale debt-financed treasury share tender offer. "Submitting arguments and materials to the court is our role," they said, adding, "We earnestly hope and plead for the wise decision of Korea Zinc's respected shareholders."