By SEOUL (Reuters) -Shares in Korea Zinc fell as much as 29.9% to their daily lower limit in Wednesday’s trade, after the world’s top zinc refiner announced a plan to issue new stock worth 2.5 trillion won ($1.81 billion).
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 MBK in September.
Korea Zinc said in a regulatory filing its board decided on Wednesday to issue some 3.73 million shares at 670,000 won per share. This was 57% lower than Tuesday’s closing price of 1,543,000 won.
Korea Zinc will allocate 20% of the newly issued shares to its employee ownership association, which experts say could boost the number of shares friendly to current management.
The surprise move came after Korea Zinc bought back 9.85% of the company’s shares for 890,000 won each in a $1.5 billion buyback that it launched to block shareholders from selling their stakes to its top investor Young Poong and private equity firm MBK.
Korea Zinc said the new share issuance will broaden the company’s shareholder base and reduce the risks of the “national company” being delisted from the stock market.
The company said out of the 2.5 trillion won in funds to be raised, 2.3 trillion won would be used to pay off debt.
The new shares will be listed on Dec. 18, the filing said.
($1 = 1,382.9400 won)