HANKOOK STEEL Hits Jackpot with Gunbuk Factory Sale, Securing KRW 11.8 Billion Gain

[Financial News]  KOSPI-listed HANKOOK STEEL will sell its Gunbuk Factory in Haman County, South Gyeongsang Province, to its largest shareholder, Hankook Steel and Mill, for KRW 15 billion. By disposing of an asset with a book value of approximately KRW 3.2 billion, the company will secure a disposal gain of KRW 11.8 billion. The gain alone amounts to approximately 40% of the company’s market capitalization, drawing attention to the impact of the asset monetization on its financial structure and corporate value.
According to the Financial Supervisory Service’s electronic disclosure system on the 15th, HANKOOK STEEL decided to transfer the Gunbuk Factory, located in Gunbuk-myeon, Haman County, South Gyeongsang Province, for KRW 15 billion.
The difference between the sale price and the book value stands out in this transaction. The Gunbuk Factory has a book value of approximately KRW 3.2 billion, meaning the completed sale will generate a disposal gain of about KRW 11.8 billion based on a simple calculation. This is equivalent to approximately 40% of HANKOOK STEEL’s current market capitalization.
The Gunbuk Factory was previously used by HANKOOK STEEL as a production base for cast steel products. In 2018, the company halted operations at the Gunbuk Factory’s cast steel production line to improve production efficiency and reduce costs, concentrating production at the Beopsu Factory. The transaction effectively monetizes an asset that has since seen relatively limited use.
Another notable feature is that the counterparty is not an outside investor but the largest shareholder, Hankook Steel and Mill. Hankook Steel and Mill holds a 52.81% stake in HANKOOK STEEL. Its main businesses are the manufacture and sale of reinforcing bars, steel products, and billets (BILLET).
For HANKOOK STEEL, the sale of noncore real estate is expected to provide a substantial cash inflow. Market attention is likely to focus on whether the disposal gain of KRW 11.8 billion will lead to improved future earnings and a stronger financial structure.
An industry official said, "Given the size of the listed company, the fact that the asset sale gain amounts to 40% of its market capitalization is notable in itself." The official added, "However, because this is a related-party transaction with the largest shareholder, how the sale proceeds are used and whether the transaction price is appropriate will be key to any reassessment of the company’s value." 


[email protected] Kim Kyung-ah Reporter