Korea Zinc's U.S. Smelter Capital Increase to Proceed as Planned... Youngpoong and MBK Injunction Dismissed

Court Dismisses Youngpoong and MBK Partners' Request to Prohibit Third-Party Capital Increase

Youngpoong and MBK Partners, the largest shareholders of Korea Zinc, requested the court to prohibit Korea Zinc from issuing new shares to a third party, but the court did not accept their request. As a result, Korea Zinc's U.S. smelter project is expected to gain significant momentum.

On the 23rd, the day of the temporary shareholders' meeting of Korea Zinc, shareholders are lined up to enter the shareholders' meeting hall at the Grand Hyatt Seoul in Jung-gu, Seoul. Photo by Jo Yongjun

The 50th Civil Division of the Seoul Central District Court (Presiding Judge Kim Sanghoon) on the 24th dismissed the provisional injunction filed by Youngpoong and MBK Partners against Korea Zinc to prohibit the issuance of new shares, and delivered the decision to both parties.

With the court's decision on this day, the payment for the capital increase scheduled for the 26th will proceed as planned.

Previously, on the 15th, Korea Zinc announced that it would build an integrated non-ferrous metal smelter worth 11 trillion won in Tennessee, United States. In addition, the company disclosed that it had decided on a third-party allotment capital increase of approximately 2.851 trillion won to Crucible JV, a local joint venture, to secure funding.

In response, Youngpoong and MBK Partners objected, claiming that the move was "for the purpose of defending management rights, contrary to business common sense," and filed a provisional injunction with the court to prohibit the issuance of new shares.

At the injunction hearing held on the 19th, Youngpoong argued that "Korea Zinc entered into this capital increase agreement to defend Chairman Choi Yoonbeom's personal management rights." In contrast, Korea Zinc countered that "the capital increase is necessary to stabilize the supply chain of key minerals and to strategically expand business into the United States," and added that "the capital increase is intended to build a strong strategic relationship with the U.S. government."