Private equity firm MBK Partners on Thursday criticized Korea Zinc Inc. for allegedly investing in distressed firms and the deteriorating financial health of the world’s largest zinc smelter, while expressing confidence that its tender offer to buy a stake in Korea Zinc will not fail.
MBK Partners Vice Chairman Kim Kwang-il made the remarks less than a week after the private equity firm launched a 2 trillion-won (US$1.5 billion) tender offer to buy a maximum 14.6 percent stake in Korea Zinc.
Korea Zinc’s liabilities had stood at 1.4 trillion won as of June this year, compared with 41 billion won in 2019, Kim told reporters.
Kim blamed Korea Zinc for making inappropriate investments in opaque firms, including OneAsia Partners, which has been accused of allegedly inflating stock prices of SM Entertainment.
“Plainly speaking, it spends cash like water,” Kim said.
Asked about whether the tender offer would succeed or not, Kim replied, “I don’t think that it will fail.”
However, Kim hinted that MBK Partners
would not increase the offer price.
Kim also defended the tender offer for Korea Zinc Inc., saying it is not a hostile takeover bid.
“We are making a tender offer to boost our stake as the largest shareholder, not to engage in a hostile takeover or merger,” Kim said.
“This tender offer is part of a management buyout agreed upon with the current majority shareholder,” he added.
The tender offer has sent Korea Zinc’s stock to a record high. At one point during Thursday trading, shares of Korea Zinc jumped 7.36 percent to 715,000 won.
Source: Yonhap News Agency
