DaeHan Cable and KG Steel Sign Mutual Investment Agreement... "Securing Site for Undersea Plant 2"

Acquired 65,000 Pyeong of Gode Earth for Site Use
KG Steel Acquires Convertible Bonds of Daehan Electric Wire

Daehan Electric Wire and KG Steel have formed a strategic partnership centered on the submarine cable business. The strategy is to maximize synergy by establishing the largest cable production cluster in Korea.

Korea Electric Wire and KG Steel are taking a commemorative photo after signing a mutual investment agreement. From the left, Kim Daeheon, President of Planning at Hoban Group; Song Jongmin, Vice Chairman of Korea Electric Wire; Park Seonghee, President of KG Steel; Kwak Jeonghyeon, President of Management Strategy at KG Group. Photo by Korea Electric Wire

Daehan Electric Wire announced that on the 19th, it signed a mutual investment agreement with KG Steel at Hoban Park in Umyeon-dong, Seocho-gu, Seoul.

Daehan Electric Wire will purchase land from KG Steel for the construction of its second submarine cable factory. KG Steel will acquire convertible bonds (CB) from Daehan Electric Wire as payment for the land. Both parties aim to jointly enhance future value as financial investors. The two groups plan to strengthen business cooperation and build a future-oriented collaboration model.

First, Daehan Electric Wire will purchase approximately 215,000㎡ (about 65,000 pyeong) of land in the Gode District of Asan National Industrial Complex, Dangjin-si, Chungnam Province, to use as the construction site for the second submarine cable factory. This site is adjacent to the currently operating first submarine cable factory and is close to major production facilities such as the Dangjin Cable Factory and the Solution Factory. After the factory is completed, it is expected to establish the largest cable production cluster in Korea. Daehan Electric Wire’s strategy is to maximize synergy by concentrating production facilities to produce all cable-related products?including underground and submarine cables, power and communication cables, materials, and finished products?in one area.

KG Steel will receive 110 billion KRW in land payment through convertible bonds. KG Steel highly values Daehan Electric Wire’s future potential and believes that mutual cooperation can further increase corporate value.

Daehan Electric Wire plans to proceed with the construction of the second submarine cable factory in phases using funds secured through a paid-in capital increase in March and the issuance of convertible bonds this time. In response to the growing global demand for submarine cables, the company plans to establish state-of-the-art facilities such as a Vertical Continuous Vulcanization (VCV) tower to produce 620kV-class ultra-high voltage direct current (HVDC) submarine cables and external network submarine cables.

Through the agreement, the two companies will seek to create synergy in the North American market. Since both companies have accumulated decades of experience and know-how in the North American market, they plan to establish a cooperative system to expand exports to the United States and beyond.

Song Jong-min, Vice Chairman of Daehan Electric Wire, said, "Through cooperation with KG Steel, we have been able to secure the optimal location for the construction of the second submarine cable factory. We will make every effort company-wide from factory construction to order expansion to continuously increase corporate value in the global offshore wind power market."

Kim Dae-heon, President of Planning at Hoban Group, said, "The meeting of two competitive groups will create great synergy. Starting from this agreement, we will build a close partnership and cooperate in various ways to ensure the mutual growth of both groups."

Gwak Jeong-hyun, Head of Management Strategy at KG Group, said, "This partnership, which goes beyond industry boundaries, will serve as an opportunity to create growth momentum. By generating synergy with key industry partners, we will further enhance future growth potential."

Daehan Electric Wire, established in 1941, is Korea’s first electric wire company. In May, it completed the first phase of its first submarine cable factory and is currently producing submarine cables. A Daehan Electric Wire official stated, "Our company is the only one in Korea to secure a Cable Laying Vessel (CLV) for offshore wind power, and we have the capability to carry out the entire submarine cable value chain?from design, production, transportation, and construction to maintenance."