SmartKarma "Korea Zinc Rights Offering Decision... Worst Korea Discount"

Douglas Kim, an analyst at SmartKarma, a global independent investment research platform, criticized the 2.5 trillion KRW rights offering by Korea Zinc on the 31st. The Korea Zinc board of directors had resolved the rights offering of 3.73 million shares (20%) at a planned price of 670,000 KRW per share the day before.

Analyst Kim stated, "Korea Zinc's decision on the rights offering is the worst example of the Korea discount," and added, "In the coming weeks, the rights offering decision will exert negative pressure on Korea Zinc's stock price." He mentioned, "Many investors are extremely concerned because this rights offering will seriously dilute their ownership in Korea Zinc."

He saw several implications in Korea Zinc's large-scale rights offering, including ▲ Chairman Choi Yoon-beom's lack of confidence in winning the voting rights battle next year against MBK Partners and Young Poong by direct confrontation ▲ the possibility that major investors who had been neutral, such as the National Pension Service, might vote against the Choi family if the voting rights battle occurs ▲ Chairman Choi's uncertainty about relationships with major Korean conglomerates holding shares in Korea Zinc ▲ ongoing concerns about margin call risks due to the decline in Young Poong Precision's stock price.

Analyst Kim said, "Most investors will agree that this rights offering is not in the best interest of minority shareholders but rather the best means for Chairman Choi to maintain his management control."

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