Paid-in Capital Increase Scheduled for the 26th to Proceed as Planned
U.S. Smelter Project Gains Significant Momentum
Young Poong: "Mid- to Long-term Management Risks Remain Unresolved"
After the court rejected Young Poong's request for an injunction to prohibit Korea Zinc's third-party paid-in capital increase for its U.S. smelter investment, Korea Zinc issued a statement welcoming the court's decision.
On the 24th, Korea Zinc released a statement saying, "We thank the court for its wise judgment," and added, "We will do our utmost to carry out the Crucible Project, which will drive Korea Zinc's future growth, without any setbacks and lead it to success, thereby enhancing our corporate value and increasing value for our shareholders." The company continued, "As a key player in the critical minerals supply chain, all Korea Zinc employees will unite and work hard to contribute to the national economy and to the economic security of the Republic of Korea."
On this day, the 50th Civil Division of the Seoul Central District Court (Chief Judge Kim Sanghoon) dismissed the injunction request filed by Young Poong and MBK Partners against Korea Zinc to prohibit the issuance of new shares and delivered the ruling to both parties.
As a result, the payment for the paid-in capital increase scheduled for the 26th will proceed as planned. Korea Zinc's U.S. smelter project is also expected to gain significant momentum.
Previously, on the 15th, Korea Zinc announced plans to build an integrated non-ferrous metal smelter in Tennessee, United States, with an investment of 11 trillion won. The company also disclosed that, to raise funds, it had decided to allocate approximately 2.851 trillion won in a third-party paid-in capital increase to the local joint venture, Crucible JV.
In response, Young Poong and MBK Partners objected, calling it a "management rights defense measure that defies business logic," and filed for an injunction with the court to prohibit the issuance of new shares.
At the injunction hearing held on the 19th, Young Poong argued that Korea Zinc entered into the paid-in capital increase agreement to defend Chairman Choi Yoonbum's personal management rights. They also pointed out that the structure, in which Crucible JV-a joint venture established by Korea Zinc and the U.S. Department of Defense-would secure a 10% stake in Korea Zinc through a third-party paid-in capital increase, was "unusual and distorted."
On the other hand, Korea Zinc countered that the paid-in capital increase was necessary to stabilize the critical minerals supply chain and to strategically expand its business into the United States.
In response to the court's decision to dismiss the injunction, Young Poong and MBK Partners issued a statement expressing regret, saying, "We believe that the concerns raised through this process-such as the potential harm to existing shareholders' value, the fairness of the investment contract, and the financial and managerial risks that Korea Zinc will bear in the mid- to long-term-have not been fully resolved." They added, "We want to make it clear that raising these issues stems from our sense of responsibility as the largest shareholder to ensure Korea Zinc's sustainable growth and to protect the interests of all shareholders."
They further stated, "As the largest shareholders, Young Poong and MBK Partners intend to support Korea Zinc so that the U.S. smelter construction project can deliver tangible win-win results not only for the United States but also for Korea Zinc and the Korean economy as a whole."
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