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Korea Zinc shares dive after announcing $1.8 bln brand-new stock issuance

Shares in Korea Zinc fell as much as 29.9% to their everyday lower limit in Wednesday's trade, after the world's leading zinc refiner announced a strategy to issue brand-new stock worth 2.5 trillion won ($ 1.81. billion).

Run by the Choi family, Korea Zinc has actually been in a bitter. fight to manage the $18 billion zinc empire with the. co-founding Chang family, whose conglomerate Young Poong. made an initial joint offer with MBK in September.

Korea Zinc said in a regulatory filing its board selected. Wednesday to issue some 3.73 million shares at 670,000 won per. share. This was 57% lower than Tuesday's closing cost of. 1,543,000 won.

Korea Zinc will allocate 20% of the recently issued shares to. its worker ownership association, which specialists state could. enhance the variety of shares friendly to current management.

The surprise move followed Korea Zinc bought back 9.85% of. the company's shares for 890,000 won each in a $1.5 billion. buyback that it launched to block shareholders from selling. their stakes to its leading financier Young Poong and private equity. company MBK.

Korea Zinc said the new share issuance will widen the. company's shareholder base and lower the threats of the nationwide. business being delisted from the stock market.

The business stated out of the 2.5 trillion won in funds to be. raised, 2.3 trillion won would be used to pay off financial obligation.

The new shares will be listed on Dec. 18, the filing said.

(source: Reuters)