Korea Zinc wins export control ruling amid fight to thwart takeover

YoungPoong

18/11/2024 03:35

By Jack Kim
       SEOUL, Nov 18 (Reuters) - Korea Zinc  010130.KS , whose
management is embroiled in a takeover battle for the world's top
refined zinc producer, said on Monday a government panel had
found its lithium-ion battery material technology was subject to
export controls.
    The industry ministry, which has a committee of experts to
review and rule on applications for designating "national core
technology", also said the panel had recently granted Korea
Zinc's case and notified it of the decision without elaborating.
    Korea Zinc has been trying to thwart a takeover by rival
zinc maker Young Poong  000670.KS  and private equity firm MBK
Partners. 
    During the takeover tussle, Korea Zinc has raised concerns
about whether new management could opt to sell the zinc
producer, which also supplies materials used for microchips and
electric vehicle batteries, to a foreign entity. 
    MBK and Young Poong said last month they had no plans to
sell Korea Zinc to China, which is the world's largest zinc
producer. 
    MBK said on Monday as the largest shareholder it welcomed
the designation, but the ruling on national core technology did
not erase damage to shareholders caused by the company borrowing
a large sum to finance a tender offer.
        Korea Zinc 
    borrowed heavily
     to buy back $1.5 billion of its shares at a premium last
month. 
  
    Korea Zinc together with affiliate KEMCO hold the technology
for the precursor material for cathodes in lithium ion batteries
made from nickel, cobalt and manganese. 
    "The ruling will be the foundation to build a stable
self-sufficient supply chain of the key material for secondary
batteries based on entirely domestic technology," Korea Zinc
said in a statement. 
    The designation is yet to be made official through a public
notice.     
    South Korean law states that the government controls the
transfer of such technology "whose leak abroad could have a
material adverse effect on national security and development of
the national economy." 
    Last week, Korea Zinc announced it was dropping a plan to
issue $1.8 billion in new shares in the latest bid by Chairman
Yun B. Choi to retain control of the company.
    Choi and a group friendly to him hold about a 35% stake.
Young Poong and MBK have nearly 40% of the shares after a tender
offer.

 (Reporting by Jack Kim and Hyunjoo Jin
Editing by Ed Davies)
 ((jack.kim@thomsonreuters.com; +822 6936 1455;))