MBK Partners increases stake in Korea Zinc

(Yonhap)

South Korean private equity firm MBK Partners, which is working to secure management control of Korea Zinc Co., acquired an additional 1.36 percent stake via on-market purchases following the end of its public tender offer.

MBK Partners and Young Poong Co. now hold a 39.83 percent stake in the non-ferrous metal smelting company, widening the stake gap with Korea Zinc Chairman Choi Yun-beom and his allies by over 5 percentage points.

According to the Financial Supervisory Service‘s electronic disclosure system on Monday, MBK’s special purpose vehicle (SPV), Korea Corporate Investment Holdings, acquired 282,366 shares, or 1.36 percent, of the total issued shares of Korea Zinc from October 18th, 2024, to the present. This raises the MBK-Young Poong alliance’s stake from 38.47 percent to 39.83 percent.

In this situation, Choi and his allies will likely lose the vote showdown unless they can secure support from the National Pension Service (NPS) and other shareholders. Even with allied forces, Choi‘s stake is estimated to have dropped to around 34.65 percent due to defections, including from Korea Investment & Securities Co. which previously held 158,861 shares, or 0.87 percent, of Korea Zinc.

Meanwhile, the NPS, which holds a critical “swing vote,” reduced its stake in the company from 7.8 percent to 7.4 percent. There is a possibility that Choi may appeal to the NPS and other shareholders by retracting a proposed rights offering.

Korea Zinc is known to be carefully considering persuading its board members to withdraw the rights offering plan, which the Financial Supervisory Service opposes.