Seoul: Korea Zinc Co., the world's largest refined zinc smelter, announced plans to cancel over 2 million of its own shares valued at 1.82 trillion won (US$1.29 billion) this year to enhance share value. The retirement of 2.04 million treasury shares accounts for 9.85 percent of the company's total issued stocks.
According to Yonhap News Agency, the stock retirement will occur in three phases scheduled for June, September, and December. Korea Zinc had repurchased 2.08 million of its own stocks last year as a defensive measure against a takeover attempt by its largest shareholder, Young Poong Corp., and its private equity ally, MBK Partners Ltd.
Earlier this year, in March, Korea Zinc's chief successfully retained his position and control over the company's board. This outcome followed a decision by a Seoul court that limited the voting rights of its largest shareholder concerning new board members. The management struggle originated on September 11 when the Young Poong group initiated a tender offer to acquire an additional stake in the zinc smelter.
In reaction to the takeover threat, Korea Zinc, backed by Bain Capital, conducted a significant stock buyback to maintain control.