OCI to spin off to create holding company in May

OCI vice chairman Lee Woo-hyun [Image source: OCI]

OCI Co., a South Korean chemical and renewable energy company, is expected to separate some of its operations to create a holding company in May, with vice chairman Lee Woo-hyun stepping into a role as the group chairman.

The company’s chairmanship has remained unfilled since the late Chairman Lee Soo-young, the father of the current vice chairman, passed away at the end of 2017.

According to sources on Monday, OCI launched discussions about a new leadership system with the establishment of a holding company.

Upon approval at its annual shareholder’s meeting next month, OCI will be separated into holding and business arms.

Sources said there is a possibility that the vice chairman will be appointed as chairman in late April or early May at the earliest, but the appointment may be delayed until major changes and milestones such as the OCI spin-off, capital increase for OCI Holdings, and the anniversary of its corporate founding are completed.

OCI will begin official procedures to launch a holding company next month. OCI plans to hold a shareholders’ meeting on March 22 to seek approval for the separation, which will be executed on May 1, and stock market re-listing will follow on May 29. OCI Holdings plans to finalize a new governance structure by completing a planned capital increase through investment in kind within the third quarter at the earliest.

Market watchers believe that the vice chairman will further cement his dominance after a shift to a holding company system.

Vice chairman Lee Woo-hyun controls only 5.04 percent of the company, lower than 5.43 percent held by his uncle Lee Hwa-young, chairman of Unid Co., and 5.40 percent by SGC Group Chairman Lee Bok-young. The vice chairman is expected to invest his stake in OCI into the new OCI Holdings to increase his power.

Meanwhile, Seo Jin-seok, former head of Ernst & Young in Korea, is likely to be the new chief executive officer of OCI Holdings.