This article was published on April 11, 2025, at 5:42 p.m. on the ChosunBiz MoneyMove site.
Choi Yun-beom, chairman of Korea Zinc, borrowed 130 billion won from Hana Securities for a public purchase of KZ Precision (formerly Young Poong Precision) amid a management dispute, but confirmed that the repayment could not be made when the maturity date arrived, leading to an extension.
On the 11th, according to investment banking (IB) industry sources, a special purpose company (SPC) established by Chairman Choi, Jericho Partners, recently reached an agreement with Hana Securities to extend the repayment deadline for approximately 130 billion won. The duration of the extension has not been disclosed, but it is estimated that it was extended for at least six months.
Earlier, Jericho Partners, established with investments from the Choi family, borrowed 130 billion won from Hana Securities in October of last year. The minimum fixed interest rate is 5.7%, with the borrowing date on October 18 and maturity occurring six months after the initial withdrawal date. Therefore, it was a situation where the maturity was due this month.
The public purchase of KZ Precision was a strategy to gain an upper hand in the management dispute at Korea Zinc. As Young Poong and MBK Partners sought to increase their stake in Korea Zinc by taking control of KZ Precision, Chairman Choi's side also initiated a competing public purchase. KZ Precision holds 1.85% of Korea Zinc's shares, meaning that if Young Poong and MBK secured management of KZ Precision, they would effectively obtain the same as a 3.7% voting share in Korea Zinc. Hana Securities was the handling agent for Chairman Choi's public purchase at that time.
Initially, Jericho Partners borrowed 100 billion won from Hana Securities. However, as the competition to secure equity intensified, the public purchase price set by Chairman Choi's side increased from 30,000 won to 35,000 won, and the target volume expanded from 25% to 35% of the total issued shares. Consequently, the borrowing fund from Hana Securities also increased from 100 billion won to 130 billion won.
The Choi family borrowed 20 billion won not only from Hana Securities but also from TKG Taekwang. However, this has a maturity date until October of this year, so they have a relatively more relaxed situation.
At that time, Chairman Choi's side successfully defended management control through the public purchase of KZ Precision, securing 34.9% of the equity. As of the end of last year, Chairman Choi's equity stake in KZ Precision was 70.28%.