Yonhap reported that POSCO, South
Korea's leading steelmaker, is accelerating its push to sell unnecessary assets
as part of its efforts to focus more on its key business and strengthen its
financial soundness.
Industry sources said that POSCO sold KRW 28
billion worth of real estate last year, including buildings and land in Pohang,
its main base on the southeast coast and Gwangyang on the south coast. The sale
was decided as the assets were regarded as idling or unnecessary to hold onto
in carrying out its core business.
With the sale, POSCO will be able to reduce
taxes and maintenance costs by about KRW 1.9 billion annually. Such efforts
will likely accelerate going forward, with POSCO seeking to unload KRW 47
billion worth of real estate this year.
In a related move, the company is reportedly in
talks with retail giant Lotte Shopping to sell a building and a land site in
Pohang where Lotte Mart is operating for about KRW 18 billion.
A company official said that we will keep
selling real estate that has no direct bearing on our core steelmaking business
to improve financial status and enhance the overall efficiency in asset
management.
POSCO also is pushing to complete the sale
process for its subsidiaries, including POSCO Specialty Steel for which the
company already signed a deal late last year to sell its shareholdings to SeAH
Besteel Corporation for KRW 1.1 trillion.
In October, the steelmaker tapped Hahn &
Company, a private equity group, as the primary negotiation partner for the
sale of POSFINE, a company that sells ground blast furnace slags to cement
makers.
The asset sale effort is in line with the
business plan unveiled earlier last month during an investor relations meeting,
in which POSCO promised to cut back on investment and sell assets deemed to be
non core.
Mr Kwon Oh joon CEO of POSCO said that the
company will strengthen its financial soundness by securing some 1 trillion won
this year through planned corporate restructuring, such as an affiliate sale.
Source: steelguru