Korea Zinc to Issue New Shares Amid Takeover Battle.

Seoul: Korea Zinc Co. announced on Wednesday its intention to issue new shares as part of its ongoing efforts to thwart a takeover attempt by its largest shareholder and a private equity firm. The company plans to issue 3,732,650 shares, representing approximately 18 percent of its outstanding shares, with the aim of raising 2.5 trillion won (US$1.8 billion) at a price of about 670,000 won per share. The subscription period is scheduled for December 3-4, as stated in a regulatory filing. According to Yonhap News Agency, Korea Zinc will allocate 20 percent of the new shares for employee subscriptions on December 3. The final price for the shares will be determined just days before the subscription period begins. The company clarified that the rights issue is intended to mitigate stock price volatility amidst an escalating struggle for control involving Young Poong Corp. and MBK Partners. Additionally, the share sale aims to prevent Korea Zinc, the world's largest refined zinc smelter, from being designated as an issue of concern by the Korea Exchange, which could lead to involuntary delisting from the main bourse. The move is largely perceived as Korea Zinc's strategy to acquire more treasury stocks with voting rights in its tussle with the Young Poong camp. MBK Partners has accused Korea Zinc Chairman Choi Yun-beom of using company resources to retain his management control at the cost of existing shareholders' interests. MBK and Young Poong have expressed their intent to pursue all possible legal measures to oppose the share sale plan. Currently, the Young Poong group holds a 38.47 percent stake in Korea Zinc following a tender offer, while Chairman Choi and his affiliates collectively own 35.4 percent after a recent buyback. The announcement of the share issuance led to a significant drop in Korea Zinc's stock price, which fell by the daily limit of 30 percent to 1,081,000 won, significantly underperforming the broader Korea Composite Stock Price Index's 0.9 percent decline.