Korea Zinc Refutes Misinformation, Reinforces Commitment to Shareholders and Long-term Strategy By Investing.com

SEOUL, South Korea–( BUSINESS WIRE )–Korea (KRX:010130) today issued a statement to deny false allegations and misleading claims made by MBK Partners during a December 10 press conference.

This press release includes multimedia.View the full release here: https://www.businesswire.com/news/home/20241215499770/en/

MBK falsely claimed that Korea Zinc spent at least KRW 1.2 trillion on President Yun B. Under Choi, without proper board oversight, while claiming that those investments caused a loss of corporate value of KRW 3.4 trillion.

To support these claims, MBK has arbitrarily used unfamiliar terms such as Lost EBITDA Opportunity (SO:), Lost Enterprise Value Opportunity and Lost Shareholder Value Opportunity, which are neither standard in accounting practice nor widely accepted financial analysis.Using speculative assumptions and unverified data, MBK attempted to mislead shareholders, the market and the media significantly. damaging the reputation of Korea Zinc.

MBK claims that while Korea Zinc allocated KRW 582 billion that was used to invest in new businesses, including the resource processing business, KRW 569 billion was used to invest funds unrelated to the core business, and KRW 900 billion was used is to buy back shares in other projects, it could have created KRW 3.4 trillion in value.

However, this claim clearly shows MBK’s lack of long-term vision and understanding of the new business. It also highlights MBK’s inability to effectively manage Korea Zinc’s financial investment activities and business investments MBK’s comment on reflects a misunderstanding and appears to be based on selective reporting.

Notably, MBK even included the value of the Korean Zinc share buybacks made to avoid their predatory hostile M&A attempts, falsely claiming that this resulted in a loss of corporate value.

The obscurity and lack of long-term corporate vision of Korea’s zinc resource processing business

First and foremost, Pedalpoint Holdings, including Igneo Holdings, is central to the resource processing business and has made significant progress in strengthening the value chain while pursuing new business opportunities for future growth to KRW 1.1656 trillion, while net losses decreased to KRW 30.7 billion, indicating simultaneous improvements in business expansion and profitability is that Pedalpoint Holdings will address the raw material sourcing challenges critical to the “environmentally friendly” production of Korea Zinc’s future flagship product.

In particular, Korea Zinc plans to increase its annual copper production capacity from 34,000 tons to 150,000 tons by 2028. To achieve this, the company acquired global scrap metal trading company Kataman Metals in September, and acquired local robotics solutions company ROBOne having deployed delta robots at US facilities to improve productivity.

The resource recycling market, particularly the copper sector, has significant growth potential, with global copper scrap volumes expected to grow from 16 million tonnes in 2023 to 28 million tonnes by 2050, according to the International Energy Agency’s (IEA) report titled ‘Recycling of Critical Minerals’. more than 35 times between 2030 and 2050 in years.

MBK’s assessment of Pedalpoint Holdings and Korea Zinc’s resource processing business is focused solely on short-term performance. It ignores the fact that the resource processing business is a new business area that serves as a strategic driver for future growth. This reveals MBK’s fundamental misunderstanding of Korea Zinc’s Troika Drive and further highlights MBK’s inability to push forward with new business initiatives. for

Furthermore, Korea Zinc would like to emphasize that the decision to invest in Igneo Holdings followed a thorough evaluation and analysis carried out over a period of more than a year : Comprehensive due diligence was conducted with various global consulting firms on the financial, legal and environmental aspects was coordination and evaluation checks.Korea Zinc’s technical team also performed technological evaluations.

These procedures were reported to management and reviewed by the board before final approval. Even Yang Poong’s advisor Jang Hyun-Jin agreed to the deal. However, MBK is now making baseless claims on the matter.

Misrepresentation of the nature of MBK’s financial investments

MBK has also misrepresented the nature of financial investments such as fund investments, some of which have been liquidated early and capital has since been successfully recovered. Other funds have even made a profit.

However, MBK falsely claims that these fund investments resulted in total losses, making a speculative argument that redirecting the funds to business investments would prevent damage to corporate value, a claim that has no credible basis.

MBK’s misstatements about share buyback costs

MBK has also criticized Korea Zinc for buying treasury shares through a share buyback program initiated to resolve MBK’s hostile takeover attempt. Their claim that this action has negatively affected Korea’s corporate value is unsubstantiated and raises questions about assigning responsibility.

Industry experts unanimously agree that Korea Zinc would not have incurred share buyback costs had it not been for MBK’s hostile M&A attempt. If this capital were used for new business investments, it could generate billions in increased corporate value. Moreover, MBK’s actions increased Korea Zinc’s debt and weakened its investment capacity, significantly damaging the company’s value.

A recent employee survey also revealed that a large number of Korea Zinc employees experienced tremendous stress due to MBK’s hostile M&A experience, which disrupted daily operations and seriously damaged Korea Zinc’s corporate competitiveness and human resources.

Ignoring partner Yang Pung’s low corporate value and weak management

MBK has turned a blind eye to the severe erosion of corporate value in Yang Pung, their partner in this hostile M&A against Korea Zinc.

For listed companies like Korea Zinc, corporate value is usually measured by market capitalization.From March 22, 2019 to September 12, 2024, Korea Zinc’s market capitalization increased from 8.7085 trillion KRW to 11.511 trillion. trillion KRW, an increase of 32.2%.In contrast, Young Poong’s market capital decreased from KRW 1.5252 trillion to KRW 547.1 billion, a decline of 64.1%.

A representative of Korea Zinc stated that MBK has become a world leader in non-ferrous metals with the support of employees, shareholders and local communities by distorting statistics and making baseless claims is actively damaging Korea Zinc’s corporate value.

They added: In line with the long-term vision and plans highlighted during last December’s investor day, Korea Zinc will steadily pursue its goals of reaching KRW 25 trillion in sales by 2033. This includes the promotion of renewable energy, secondary battery materials and resource recycling businesses .

View the source version at businesswire.com. https://www.businesswire.com/news/home/20241215499770/hy/

Korea zinc
Dongwu Park
+82-2-6947-2469
dwpark@koreasinc.co.kr:

Source: Korea Zinc Company, ltd