[Source: SeAH Besteel Corp.]
SeAH Besteel Corp. will split into a holding entity spearheading new growth engines and a business unit focusing on special steel manufacturing operations to better respond to rapidly changing business landscape.
The Korean special steel products manufacturer in a regulatory filing on Thursday announced it plan to break into, tentatively named, SeAH Besteel Holdings Corp. and SeAH Besteel Corp. by April 1. The company will seek final approval from shareholders at the general shareholders meeting on March 25.
The demerger will make SeAH Besteel Holdings the existing, publicly traded company, and business operation unit a newly established unlisted subsidiary.
SeAH Besteel Holdings will work as the intermediary holding company under SeAH Holdings Corp., to lead the group’s strategy in special steel manufacturing businesses – SeAH Besteel, SeAH Changwoon Integrated Special Steel, and SeAH Aerospace & Defense – as well as seek growth opportunities in new areas, including electric vehicle parts and aerospace.
The newly established business unit with the same nameplate passed down will maintain existing operation of manufacturing specified steel products, such as H-beam and alloy steel.
The company said that it does not have any plan of taking the new business unit public to ease any concerns shareholders and investors may have about the possible dilution of corporate value from public listing of the core business unit.
But SeAH Besteel shares plunged 13.83 percent on Thursday after the spinoff news. They recovered 3.68 percent on Friday to close at 15,500 won ($12.99).
Korean steel giants have been turning into holding structure to better respond to the global market’s shift to environmentally friendly business, industry experts said.
Last year, the country’s largest steel maker Posco shifted to holding structure.
By Lee Yu-sup and Cho Jeehyun
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