POSCO Holdings is selling a portion of its stakes in listed subsidiaries POSCO International and POSCO DX to secure approximately 2.5 trillion won (approximately $1.8 billion) in investment capital. The decision aims to resolve the so-called holding company discount and accelerate the ‘Triple Core’ strategy championed by Chairman Chang In-hwa.
POSCO Holdings announced on the 7th that its board of directors had resolved to dispose of 36,434,963 shares of POSCO International (047050) and 23,385,917 shares of POSCO DX (022100). The disposal value amounts to 2.0184 trillion won for POSCO International and 481.7 billion won for POSCO DX, totaling 2.5002 trillion won. The scheduled disposal date is September 7.
The transaction will be executed through a price return swap (PRS) contract. A PRS is an over-the-counter derivative in which gains or losses based on the price fluctuation of an underlying asset are settled between counterparties. POSCO Holdings has entered into a three-year contract with NH Investment & Securities. At settlement, the difference between the actual sale price and a reference price will be mutually settled. The reference price is based on the closing price on the day before the board resolution: 55,400 won per share for POSCO International and 20,600 won per share for POSCO DX. The company added that if future stock price volatility makes an after-hours block trade difficult, it may switch to an over-the-counter transaction method.
Once the stake sale is completed, POSCO Holdings’ ownership in POSCO International will decrease from 70.71% to 50.0%, and its stake in POSCO DX will fall from 65.38% to 50.0%. However, the company will maintain its position as the largest shareholder in both entities. POSCO Holdings stated the purpose of the disposal is to “resolve the holding company discount and secure strategic investment capital to enhance corporate value.”
The capital raise is seen as a core funding source for advancing the ‘Triple Core’ strategy that Chairman Chang In-hwa unveiled at a CEO Investor Day early last month. The strategy reshapes the business portfolio around ‘industrial resources’ such as steel, ‘strategic resources’ including lithium, cathode materials, and rare earths, and ‘energy resources’ like liquefied natural gas (LNG) and renewable energy. Through this plan, POSCO Group has set a target of achieving combined revenue of 187 trillion won (approximately $132 billion) and operating profit of 13.1 trillion won by 2035.
POSCO Holdings plans to invest a total of 16.7 trillion won over the next three years. Proceeds from this stake sale are earmarked for strategic investments to secure the group’s future growth engines. At the time, Chairman Chang also announced a policy to optimize the group’s stake in listed subsidiaries at 50%, raising the possibility of an additional sale of excess shares in POSCO Future M, in which POSCO Holdings currently holds a 58.2% stake, in the near future.
Add to Google Preferred Sources
Once added, BigGo Finance appears first in Google Search Top Stories, so you get the broadest, most up-to-the-minute, and most comprehensive global financial news first.