POSCO CEO Choi Jeong-woo

By Lee Kyung-min

Korea's steel giant POSCO said Wednesday that it is nearing the completion of its corporate restructuring plan, whereby an envisioned holding firm will claim the entire shares of its spun-off steelmaking operation to the exclusion of current POSCO shareholders.

The months-long move was advanced by Monday's go-ahead from the National Pension Service (NPS), POSCO's largest shareholder with a 9.75 percent stake.

"The NPS gave a positive assessment of the restructuring plan, including ways to strengthen its non-steel businesses, after the firm is divided into a holding firm and a spinoff," a POSCO official said.

Most at play was the steel giant's revision of corporate articles of incorporation, clearly stipulating that the spun-off firm is not to be listed on the stock market, major grounds the pension fund dismissed concerns of POSCO shareholders over a steep share price fall if the spinoff leads to an initial public offering.

"The revision was a key difference in the circumstances for the pension fund giving the green light, unlike its previous vetoes exercised in similar restructuring plans concerning LG Chem and SK Chem, both of which saw their share prices take a dive upon the listing of their spinoffs ― LG Energy Solution and SK Bioscience," the official said.

Monday's decision came after POSCO announced the restructuring plan at a board meeting last month, as part of a long-term reorientation of strategy to strengthen the role of the holding firm in fostering new future growth businesses including rechargeable batteries and hydrogen energy, while still maintaining exclusive ownership of the steelmaking firm.

POSCO will not seek to list neither its steel spinoff, nor its battery or hydrogen firms.

The plan will be finalized at the Jan. 28 shareholders meeting if a vote on the matter receives support from two-thirds of shareholders attending, with their combined shares accounting for at least a third of the outstanding total.

Foreign investors with a combined stake of 52.7 percent in POSCO are increasingly inching towards approving the plan, anchored by yes votes recommended by local and foreign proxy advisers including Institutional Shareholder Services (ISS), Glass Lewis and Korea ESG Research Institute.

POSCO plans to retire part of over 11.6 million shares held by the firm this year, and raise its dividend price to 10,000 won per share, up from 8,000 won that had remained unchanged for years. Its dividend payout ratio will remain at around 30 percent.

The firm registered an all-time-high operating profit of 9.2 trillion won and sales of 75.16 trillion won for last year.