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Photo = POSCO FutureM |
[Alpha Biz= Kim Jisun] The Financial Supervisory Service (FSS) of South Korea announced on May 14 that it will conduct a focused review of POSCO Future M’s KRW 1.1 trillion rights offering to support its aggressive investment strategy following a temporary demand slowdown, or "chasm."
An FSS official stated that, despite the high ownership stake held by the largest shareholder, POSCO Holdings, the offering’s scale and the large number of individual investors involved prompted the regulator to begin a detailed review. “We will ensure that the company’s disclosures meet the necessary standards, and face-to-face evaluations will be conducted,” the official added.
The focused review system, newly introduced by the FSS this year, assesses equity offerings based on seven criteria, including concerns about dilution of share value, potential harm to minority shareholders, excessive financial risk, and the underwriter’s duty of care. While some critics argue that it is inappropriate for the FSS to evaluate the appropriateness of corporate fundraising decisions, others emphasize the importance of protecting investors.
On May 13, POSCO Future M announced its decision to raise KRW 1.1 trillion through a rights offering. The funds will be used for expanding domestic and international production capacities for cathode and anode materials, including investments in a joint cathode plant in Canada and the expansion of plants in Pohang and Gwangyang.
According to the public filing, KRW 630.7 billion will be allocated for acquiring securities of other companies, KRW 288.4 billion for working capital, and KRW 181 billion for facility investments.
After the announcement, POSCO Future M’s stock price fell by approximately 6% in the alternative trading session on May 13, and by another 4% as of 3:00 p.m. on May 14, trading at KRW 115,200.
The rights offering will be conducted through a shareholder allotment followed by a public offering of forfeited shares, with a total of 11.48 million new shares to be issued at a projected price of KRW 95,800 per share.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
