"Posco Calms Shareholders by Announcing Treasury Stock Cancellation and Dividend Increase"

[Asia Economy Reporter Choi Daeyeol] POSCO has decided to burn some of its treasury shares and increase dividends as part of its shareholder-friendly policy. This measure aims to alleviate shareholders' concerns amid the upcoming transition to a holding company structure and the physical spin-off of major businesses.

Choi Jeong-woo, Chairman of POSCO Group, recently stated in a shareholder letter, "According to the mid-term dividend policy, we will maintain a consolidated dividend payout ratio of around 30% until 2022, and thereafter plan to pay a minimum dividend of 10,000 KRW or more considering corporate value. We will also conduct treasury share cancellations within this year for some of the currently held treasury shares to meet expectations for enhancing shareholder value."

POSCO disclosed this information on the 5th, announcing that it will hold an extraordinary general meeting of shareholders on the 28th to approve the transition to a holding company. According to the company, it currently holds 11.6 million shares (13.3%) of treasury stock, and some of these will be canceled. The specific quantity and timing were not disclosed.

Previously, the company bought back or canceled treasury shares four times between 2001 and 2004, eliminating a total of 9.3 million shares. Treasury share cancellation reduces the total number of shares, thereby increasing the value per share. Dividends have been around 8,000 to 10,000 KRW per share in recent years, and this will also be increased. The mid-term dividend policy will be reviewed every three years.

This measure is interpreted as an effort to quell concerns arising from the decision to spin off the group's core steel business as a subsidiary under the holding company through a physical spin-off. Although there have been several cases of 'listing after spinning off profitable businesses,' which has generally been viewed negatively, POSCO clearly stated that the steel subsidiary spun off will remain unlisted. The articles of incorporation will reflect the requirement of a special resolution at the shareholders' meeting to list the newly established steel subsidiary. Even if funds are needed, the company plans to prioritize capital increases by the holding company rather than listing.

This content was produced with the assistance of AI translation services.