Co-managing families Choi and Chang 'in conflict'
Korea Zinc’s expansion into energy and resource development businesses could mean that it could end its relationship with its largest shareholder Youngpoong Group.
On Wednesday, Korea Zinc announced that it will commence share swaps with LG Chem and Hanwha Corporation worth 256.7 billion won and 156.8 billion won, respectively.
The company is also planning to receive 372.3 billion won in investment from Trafigura, Morgan Stanley, and Korea Investment Securities.
Korea Zinc said the funding from the three companies, which will pitch in 202.5 billion won, 65.3 billion won, and 104.5 billion won, respectively, is aimed at developing its battery material, hydrogen, wind, and other environmentally friendly energy businesses and overseas resource development.
But sources said it also signals that Korea Zinc vice chairman Choi Yun-beam and Korea Circuit vice chairman Chang Se-joon may be going their separate ways. The two men are third-generation leaders of their respective families.
The families of Chang and Choi both run Youngpoong Group. The Chang family oversees the holding company Youngpoong Corporation as well as Youngpoong Electronics and Korea Circuit.
Korea Zinc is the Choi family’s main business. Hanwha Group secured another 5% shares in Korea Zinc in August, making its total of 6.88%.
Youngpoong Group bought 6,402 shares following this move by Hanwha to increase its own shares of Korea Zinc.
Korea Zinc’s recent share offers to Hanwha and others are its attempt to become independent from Youngpoong Group.
This conflict between the two families is worsening as Youngpoong is also attempting to start its own battery material business, Korea Zinc’s main revenue source, people familiar with the matter said.
Korea Zinc vice chairman Choi is also attempting to move the company’s building out of the one by Youngpoong which the companies share.
This is to make sure its technologies related to dry smelting and battery recycling don’t leak to Youngpoong, sources said.