In This Article:
(Bloomberg) -- Investors in Korea Zinc Co. are set to determine the winner of a bitter, months-long battle for control on Thursday, with a shareholder vote that will establish the shape of the company’s board and its future direction.
Most Read from Bloomberg
-
How Sanctuary Cities Are Preparing for Another Showdown With Trump
-
Texas HOA Charged With Discrimination for Banning Section 8 Renters
-
LA Schools Wrecked by Fires Plead on GoFundMe for Help to Reopen
The world’s largest producer of refined zinc has been caught for months in a public feud between its chief executive, Yun B. Choi, and top shareholder Young Poong Corp., which made a surprise, unsolicited takeover offer in September, backed by private equity firm MBK Partners Ltd.
Korea Zinc rebuffed the approach, announced a share buyback and then a share issue — which was ultimately scrapped and described by Choi as a “tactical error”. The company has since warned that the tussle has been a distraction to management and employees, and warned of a tough outlook.
Though scheduled to start early on Thursday at a Seoul hotel, morning proceedings were delayed while the two sides tallied proxy statements and unions staged a protest at the venue. The main Korea Zinc union has threatened a strike if the MBKP-Young Poong consortium takes control of the board.
Shareholders at the extraordinary meeting will be called to vote on two visions for the company. The MBKP-Young Poong alliance — which holds about 41% of Korea Zinc — wants to add 14 new directors to an existing 12-member board.
If successful, their plan would effectively sideline Choi. After Korea Zinc’s last-minute share buying in Young Poong, however, it is not clear whether Young Poong will be able to exercise all its voting rights.
Korea Zinc, meanwhile, has the backing of closer to 35% of shareholders, and had sought to introduce a cumulative voting system intended to amplify minority shareholders and its own voice, before a court injunction limited that. It wants to appoint seven new directors, to maintain its grip.
The company is more than a bellwether of changing culture in a country where activism and audacious private equity gambits are rare.
It is a critical piece of global efforts to edge away from Chinese dominance. Including affiliates, the company accounts for 12% of the world’s zinc produced outside of China, a key ingredient used in applications including in electric vehicle batteries. It also accounts for 5% of lead and around 9% of its silver produced outside of China, according to Bloomberg analysis using data from consultancy CRU Group.