POSCO Physical Division... Transition to Holding Company Structure
Today’s Board Meeting... Subsidiary to Take Over Steel Business
[Asia Economy Reporter Hwang Yoon-joo] POSCO is transitioning to a holding company structure. Currently engaged in the steel business, POSCO will become a holding company conducting investment activities while overseeing operating companies, and the existing steel business will be separated into a subsidiary through a physical division. POSCO, ranked sixth among business groups with six listed companies and 28 unlisted companies, is undergoing its biggest governance change since privatization in 2000.
According to business circles on the 10th, POSCO discussed the agenda for transitioning to a holding company at a board meeting that morning. There had been much market interest regarding which division method to adopt, and ultimately, the physical division method was proposed and discussed. The subsidiary spun off from POSCO will handle the steel business, but this steel company will not be listed; instead, the holding company will own 100% of the shares of the newly established subsidiary managing the steel business.
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Some speculated that a spin-off recognizing the current shareholding ratio (a type of equity division) might be chosen to gain shareholder support, but the decision is interpreted as considering burdens such as treasury stock repurchases.
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