À̹ÌÁö È®´ë South Korea¡¯s top steelmaker Posco plans to break up into a holding entity responsible investment in non-steel area and a business unit, catching up with other Korean business majors in reorganization for agile response to changing business environment.
According to multiple sources from the conglomerate circle on Wednesday, Posco will motion the restructure scheme at a board meeting on Dec. 10. The new structure will go into effect upon shareholders¡¯ approval in January.
Posco is revamping to respond better to the rapidly changing business landscape driven by world-wide net zero movement and acceleration in technology innovation, said an unnamed official from Posco, adding that the company will announce details upon confirmation.
Jeon Joong-seon, vice president of strategic planning at Posco, has led a task force to spearhead of overhaul.
Under one scenario, Posco would separate its mainstay steel business into a subsidiary under a new investment holding company, tentatively named Posco Holdings. While wholly owning the steelmaking unit after spinoff, the holding parent will focus on investment in battery materials and green growth.
In this scenario, Posco Holdings will be at top in management structure with units under its arm – steelmaking unit Posco with full ownership, Posco Chemical (59.72 percent), Posco International (62.91 percent), Posco Engineering & Construction (52.8 percent), and Posco Energy (89.02 percent).
The change is expected to help simplify decision making procedure in the steelmaking group and expedite the growth of each new growth business.
When the demerged steelmaking unit maintains its non-listed position, the holding entity could enjoy improved value of other subsidiaries.
The company is also exploring another option of an equity spinoff that allows existing shareholders to hold shares of both the business and investment entities. The link between the holding firm and business entity will weaken but the value of holding company without the steelmaking business would improve. The value of companies that carried out equity spinoffs this year have gone up – that of F&F, SK Telecom, and former Daelim Industrial.
Posco, however, would need an additional procedure of meeting requirements to shift into a holding company structure through an equity spinoff because Posco Holdings¡¯ ownership in Posco after the equity spinoff would be 13.26 percent, which is below 30 percent requirement under the country¡¯s fair trade act.
Shares of Posco rose 1.62 percent to end at 281,500 won ($239.47) on Thursday.
By Han Woo-ram and Lee Eun-joo
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]