Flags hang over the entrance to POSCO Center in Seoul, in this file photo. Courtesy of POSCO
POSCO Chairman Choi Jeong-woo
By Park Jae-hyuk
POSCO’s stock price surged to 277,000 won, Wednesday, up 6.13 percent compared to the previous close, after investors bet on the possibility of the steelmaker being spun off to set up a holding company in charge of managing eco-friendly businesses related to hydrogen fuel cells, advanced materials and renewable energy.
The nation’s sixth-largest company in terms of assets said the specifics of its governance reform remain uncertain.
The steel giant was reported to have organized a task force recently to win support for its spinoff plan from its board members during the forthcoming Dec. 10 meeting, and from its shareholders, including the National Pension Service (NPS), which holds a 10-percent stake, and BlackRock, which holds a 5-percent stake, during the extraordinary general meeting of shareholders in January.
Following these reports, POSCO’s stock price briefly rose 8 percent in intraday trading, Wednesday.
POSCO is expected to allow the current shareholders to exercise their rights over the divided companies ― the one in charge of the steelmaking business and the holding company that controls its major affiliates, such as POSCO Chemical, POSCO International, POSCO C&C and POSCO ICT.
According to sources, its possible group overhaul plan came after POSCO Chairman Choi Jeong-woo was displeased to see the continuous fall in the company’s stock price despite satisfactory earnings.
The steelmaker posted 20.6 trillion won ($17 billion) in sales and 3.1 trillion won in operating profit during the third quarter. It was the first time that POSCO’s quarterly operating profit exceeded 3 trillion won. Financial information provider FnGuide has also forecast POSCO’s annual sales and operating profit to reach 75 trillion won and 9 trillion won, respectively.
After the announcement of its third-quarter earnings on Oct. 13, however, POSCO’s stock price, which was above 320,000 won, gradually fell to below 270,000 won, making it more difficult for the steelmaker to be among the top 10 KOSPI-listed companies in terms of market cap.Internet Explorer Channel Network