POSCO gains shareholders' blessing to convert into holding structure

South Korea’s POSCO gained shareholders’ approval to split it into a holding entity POSCO Holdings and a standalone steel-making subsidiary POSCO in March.

The plan gained a vote of approval by 89.2 percent of POSCO’s shareholders on Friday. Voter turnout came at 75.6 percent in terms of the number of shares.

As of the end of September, POSCO shares were held 9.75 percent by the National Pension Service, 7.30 percent by Citibank Korea, and 1.41 percent by employee union. Institutions, foreigners and retailers held the remaining 80 percent.

The scheme was passed despite some protest from retailers on concerns about share dilution and uncertainty over the stock cancellation plan.

POSCO Chairman Choi Jeong-woo

Under the scheme, the existing company will transform into a holding entity to focus on exploration of the group’s new business opportunities and investment and own a 100 percent stake in the standalone steel-making subsidiary. The official launch of the two is due on Mar. 2. The steelmaker’s name will stay unchanged as POSCO.

POSCO Holdings will be at the top of the group governance, below which will be POSCO and other affiliated units like POSCO Chemical, POSCO Energy, POSCO International and POSCO E&C.

“With the transition into a holding structure, we’ll be able to accelerate balanced growth of steel-making and new businesses and improve brand identity as a green energy and future materials company for better corporate value,” said Choi Jeong-woo, chairman of POSCO.

POSCO shares were trading 2.52 percent higher at 264,000 won ($219.05) in Seoul trading at 1:26 p.m. Friday.

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