Korea Zinc to Establish itself as a 'National Enterprise' Through Public Equity Offering to Expand Stable Shareholder Base

SEOUL, South Korea, Oct. 30, 2024 /PRNewswire/ -- Korea Zinc(KRX:010130), a vital player in South Korea's national infrastructure and a leader in the production of critical industrial materials, announced today its plans to conduct a public equity offering, aiming to establish itself as a "national enterprise."

This initiative will broaden the shareholder base, inviting diverse investors—small shareholders, institutions, and the general public—to become stakeholders in Korea Zinc, fostering transparency and supporting an open governance structure* tailored for the distributed ownership, enhancing oversight and accountability for long-term growth and stability.

The public equity offering is designed to ensure diversified ownership, enhance transparency, and build a fair governance system, reducing the concentration of shares among specific shareholders following recent tender offers. This shift also aims to prevent instability in core materials such as zinc, lead, gold, silver, copper, semiconductor-grade sulfuric acid, indium, cobalt, and strategic minerals like bismuth and antimony.

On October 30, Korea Zinc's Board of Directors convened an interim board meeting where they resolved to proceed with a public offering. The upcoming offering will involve issuing 3,732,650 new shares—equal to 20% of outstanding shares excluding treasury stock acquired through the recent tender. Funds raised will support investments in national strategic industries like secondary batteries, with a portion allocated to debt repayment.

80% of the newly issued shares will be open to public subscription, with 20% allocated to Korea Zinc's Employee Stock Ownership Association as legally required. Furthermore, in line with efforts to foster a broad shareholder base, Korea Zinc plans to cap individual and related-party share allocations at 3% of the offering total (111,979 shares), a practice seen in several large-scale public offerings.

The offering price will be based on the weighted average share price over the 3-5 trading days before the subscription, with a 30% discount as per issuance regulations.

Through this public offering, Korea Zinc anticipates multiple benefits, including:

• Establishing itself as a "national enterprise" through diversified ownership and a broadened shareholder base
• Reducing delisting risks from low trading volume, improving liquidity, and stabilizing share price to protect shareholders
• Mitigating risks related to exclusion from the MSCI Korea Index, which would otherwise cause stock price fluctuations and reputational harm
• Strengthening Korea Zinc's long-term growth potential and financial stability through secured funding
• Supporting employee welfare and labor-management cooperation by allocating shares to the Employee Stock Ownership Association

These actions address recent disruptions following the hostile M&A attempt by MBK Partners and Young Poong, which sharply reduced Korea Zinc's available shares, doubling stock prices within 18 trading days and sparking concerns of excessive volatility and potential delisting or designation as a managed stock.

Funds raised through this public offering will support Korea Zinc's long-term initiatives, including secondary battery investment and its Troika Drive strategy for renewable energy, battery materials, and resource recycling. This will enhance Korea Zinc's corporate value and reinforce its commitment to shareholder value.

Finally, through this national public offering, Korea Zinc is set to protect its long-term value, shielding the company and stakeholders from hostile M&As, technology leaks, and risks of overseas sales. This proactive approach aims to solidify Korea Zinc's role as a true "national enterprise," ensuring the stability and growth of South Korea's national infrastructure for years to come.