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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] POSCO Holdings is set to sell off its entire stake in Nippon Steel as part of an effort to boost liquidity through asset restructuring. This move comes as the company faces challenges in both its core steel business and its secondary battery materials segment.
According to the Financial Supervisory Service's electronic disclosure system on Wednesday, POSCO Holdings announced on March 12 that it had classified its stake in Nippon Steel, worth approximately 467.8 billion KRW, as an asset held for sale. The company explained, "We have decided to sell our long-term equity investment in Nippon Steel and have reclassified the entire 467.796 billion KRW stake as an asset for sale." The shares to be sold amount to 15,699 shares, representing 1.5% of Nippon Steel’s total equity.
POSCO Holdings and Nippon Steel have maintained a cooperative relationship since POSCO’s founding in 1968. POSCO constructed its Pohang Steelworks with technical and financial support from Nippon Steel, which also dispatched engineers to the facility. Even after POSCO developed its own proprietary technologies and grew into a global steel giant, the two companies continued their strategic partnership.
This transaction marks the end of their 25-year equity relationship. The companies first signed a strategic alliance agreement in August 2000, followed by an October 2006 agreement to deepen their partnership and acquire additional shares in each other. Notably, Nippon Steel divested its entire 3.42% stake (2,894,712 shares) in POSCO Holdings last September to fund its acquisition of U.S. Steel, generating approximately 1.1 trillion KRW from the sale.
POSCO Holdings' decision comes amid financial strain in its steel and battery materials businesses, prompting a focus on liquidity enhancement. During its earnings conference on February 3, POSCO Holdings announced plans to sell 61 low-profit businesses and non-core assets by the end of 2024. Last year, the company generated 662.5 billion KRW from the sale of 45 businesses and assets. This year, it aims to secure an additional 1.5 trillion KRW through further restructuring efforts.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
