SEOUL, South Korea, Nov. 1, 2024 /PRNewswire/ -- Korea Zinc (KRX:010130), a global leader in the production of non-ferrous metals and a key player in critical supply chains, today issued an official statement to address the concerns raised about the potential issues surrounding the general public offering the company is pursuing.
Korea Zinc has stated that considerations for a public offering took place after the share buyback expired on Oct 23 and is fully committed to working with authorities and the market to resolve the misunderstanding.
Korea Zinc has stated it is pursuing the public offering in order to address various market uncertainties and risk factors as a publicly listed company during the hostile M&A process. By increasing the number of Korea Zinc shares floating in the market, Korea Zinc is aiming to secure a healthy and diversified ownership structure.
Below is a full statement from Korea Zinc.
Dear members of the press,
We understand your busy schedules and confusion surrounding recent developments. However, given the misunderstandings surrounding the public offering we are currently pursuing, we respectfully wish to provide clarification on this matter.
Firstly, we would like to clarify that the concerns raised about the potential issues in the process of pursuing this public offering are completely unfounded.
We would also like to firmly state that considerations for a public offering took place after the share buyback expired on Oct 23.
To provide some background, when Korea Zinc conducted its share buyback, the market anticipated that the share price would normalize to the pre-tender level after its expiration. In particular, since shares purchased on Oct 22 and 23 could not participate in the share buyback, it was anticipated that the stock price would stabilize starting on the 22nd. However, trading volumes sharply declined starting on the 22nd, leading to increased market instability due to reduced liquidity. This, combined with the drop in trading volume, heightened the risk of potential delisting. In addition, the likelihood of being excluded from the MSCI Index (Morgan Stanley Capital International)[1] increased, amplifying adverse effects and prompting us to address the matter swiftly.
The due diligence report lists the 14th as the start date because during the share buyback period, we examined debt financing options with a securities firm, such as corporate bonds and commercial paper (CP), to secure low-interest funding to finance loans for the share buyback. Since Korea Zinc is a publicly listed company with disclosed information, the results of due diligence for debt financing, such as bond issuance, could largely be applied to capital increase due diligence. As such, the securities firm used the existing due diligence results for the capital increase retrospectively, causing the report to state that capital increase due diligence began on the 14th.
We sincerely apologize to our investors for any unnecessary misunderstandings this may have caused. We are fully committed to clarifying the actual facts with the authorities and the market and resolving this matter.
We respectfully request that you reach out to us directly for an explanation and include our perspective in your reporting on these matters.
The public offering is intended to increase the number of Korea Zinc shares available in the market, aiming to secure a healthy and diversified ownership structure.
We would also like to emphasize that these ongoing actions are part of our efforts to address various market uncertainties and risk factors as a publicly listed company during the hostile M&A process.
Thank you.
Korea Zinc
[1] Source: Namuwikipedia, MSCI