Court Dismisses Young Poong Group's Injunction... Korea Zinc to Proceed with U.S. Joint Venture Capital Increase as Planned

[Financial News] The court has rejected Young Poong Group’s request for an injunction to prohibit Korea Zinc’s paid-in capital increase through a third-party allocation for its investment in a U.S. smelter joint venture.
On the 24th, the Seoul Central District Court’s Civil Division 50 (Chief Judge Kim Sang-hoon) dismissed the injunction request filed by Young Poong Group and MBK Partners against Korea Zinc to block the issuance of new shares, and delivered the decision to both parties. As a result, the payment for the capital increase scheduled for the 26th will proceed as planned.
On the 15th, Korea Zinc announced plans to build an integrated non-ferrous metal smelter in the State of Tennessee, United States, with an investment of approximately 11 trillion KRW. To secure funding, the company stated it would inject about 2.851 trillion KRW into Crucible JV, a joint venture with the U.S. government, through a third-party capital increase.
In contrast, Young Poong Group and MBK Partners opposed the move, describing it as a 'defense of management control that defies business common sense,' and filed for an injunction to prohibit the new share issuance.
During the injunction hearing on the 19th, they argued that Korea Zinc entered into the contract to defend Yunbum Choi’s management control. They also criticized Crucible JV’s acquisition of a 10% stake in Korea Zinc through a third-party allocation as 'unusual and atypical.'
Korea Zinc countered that the contract was not only for supply stabilization and strategic business expansion into the United States, but also that the U.S. government had first proposed the agreement. Korea Zinc emphasized, 'Given the difficulty of conducting business without U.S. support, it was the U.S. government that initially approached us.'
If the capital increase proceeds as planned, Crucible JV will secure a 10% stake in Korea Zinc. The combined stake of Young Poong Group and MBK Partners will remain around 40%, while Yunbum Choi’s shareholding, including the JV’s stake, will reach approximately 39%.
theknight@fnnews.com Jung Kyung-soo Reporter