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[Alpha Biz=(Chicago) Reporter Kim Jisun] Regarding DB I&C's push for a merger with its affiliate DB Metal, shareholder activist fund KCGI pointed out on the 17th that it is a restructuring to avoid the transition to a holding company.
"There are suspicions in the market that the merger is aimed at preventing the forced conversion of DB Inc. into a holding company under the Fair Trade Act by increasing DB Inc. assets," KCGI said.
On the 16th, DB Inc. held a board meeting and decided to merge with DB Metal, an affiliate that manufactures and sells alloy iron.
KCGI pointed out that such a decision is only a temporary measure to avoid DB Inc.'s transition to a holding company. If the corporate value grows to KRW 6 trillion as DB Hitech's management set its goal in March, the problem of switching to a DB INC holding company may arise again.
It was also concerned that the merger of poor affiliates DB Metal and DB Inc could lead to mutual insolvency of the parent company, raising financial risks for the entire group. Although the price of Ferromangan, which is produced as its main product, rose temporarily due to the Russia-China war and the decrease in Chinese production, the price of Ferromangan turned to a downward trend and turned to a deficit with a massive operating loss of 25 billion won in the first half of this year.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
