[Source : Korea Zinc Youtube]
Korea Zinc, the world’s largest non-ferrous metal smelter in Korea, is swapping treasury shares with LG Chem Inc. and Hanwha Corp. on renewable sourcing and green cycle business and entering a joint venture partnership with international commodity trader Trafigura in total investment worth 786.8 billion won ($587.25 million).
Korea Zinc disclosed in a regulatory filing on Wednesday that it signed two stock swap deals worth 414.4 billion won ? one with LG Chem for 257.6 billion won and the other with Hanwha for 156.8 billion won. Following the swap, Korea Zinc will take a 1.97-percent stake in LG Chem and a 5.5-percent stake in Hanwha. LG Chem in return will own a 0.47-percent stake in Korea Zinc.
Separately Korea Zinc will divest 202.5 billion won worth treasury shares to Malta-based Urion Holdings under fully ownership of Trafigura, 65.3 billion won to Morgan Stanley and 104.5 billion won to Korea Investment & Securities to raise 372.3 billion won in new proceeds.
The company and Trafigura, a global commodity trading and logistics firm, will launch a JV in nickel smelting, a key material for batteries, the company said. Trafigura is the world’s major trading firm in commodities, including crude oil, metals, and minerals. Its annual revenue is around 300 trillion won.
Through its stock swap deal with LG Chem, the two sides will enhance their joint exploration of metals that can be used in manufacturing cathode materials, a key component for lithium-ion batteries.
With Hanwha, Korea Zinc will enhance partnerships in various green energy areas such as hydrogen value chain, carbon capture, wind power and resource exploration. Hanwha will take part in Korea Zinc’s green energy projects, such as building facilities for ammonia cracking, carbon capture, hydrogen fuel cells, and hydrogen gas turbines. Korea zinc will participate in Hanwha’s blue ammonia project in the United States that is under a review.
Market observers also perceive the complicate investment structure aimed to separate from parent, Young Poong Group. Non-ferrous metals manufacturer Korea Zinc was founded in 1949 by Chang Byeong-hee and Choi Ki-ho. Since then, the Choi descendants have been running Korea Zinc with other non-ferrous metal business units, while the Chang family have been managing the overall group affais and electronics units.
After Chang family continued expanding their holdings n Korea Zinc, Choi family have been upping the ante in defending ownership in the non-ferrous business.
Korea Zinc shares were down 3.8 percent to 633,000 won in the early trading on Thursday. Young Poong shares were down 3.03 percent at 768,000 won.
By Seo Jin-woo and Jenny Lee
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