By SEOUL (Reuters) – Korea Zinc‘s new share sale plan, which was announced on Oct 30 and worth around $1.8 billion, has been suspended due to a revision order by the South Korean financial regulator, a regulatory filing said on Wednesday.
This means the overall schedule related to the share sale may be changed, and if the company failed to submit a revised share sale plan within three months, it will be considered withdrawn, the filing said.
In a separate notice, the Financial Supervisory Service (FSS) said the share sale plan lacked sufficient description of the purpose and decision-making process, as well as the process of due diligence by the bookrunner, while it also noted discrepancies with the company’s earlier tender offer filing.
The world’s top zinc refiner said on Oct 30 it planned to issue new stock worth about $1.8 billion just two days after it bought back shares at a higher price.
That prompted the FSS to launch a probe to determine whether Korea Zinc’s decision to issue new shares involved any unfair practices.
In response to the regulator’s investigation launch, Korea Zinc said last week “the concerns raised about the potential issues in the process of pursuing this public offering are completely unfounded” and “considerations for a public offering took place after the share buy-back expired on Oct 23.”
After the filing on Wednesday, a Korea Zinc spokesperson said it will make its utmost efforts to resolve market confusion and misunderstanding after reviewing the FSS’ demand.
Run by the Choi family, Korea Zinc has been in a bitter fight to control the $18 billion zinc empire with the co-founding Chang family, whose conglomerate Young Poong made an initial joint offer with private equity firm MBK Partners in September.
Shares in Korea Zinc fell as much as 8% shortly after the filing, erasing earlier gains.