KG acquires 40% stake in Dongbu Steel
KG Group has become the biggest shareholder of Dongbu Steel as its joint venture KG Steel took control over its newly issued 40 percent stake, according to a regulatory filing Sept. 2.
The steelmaker -- which got a new name KG Dongbu Steel -- said KG Steel, held equally by KG Corp., KG Eco Technology Services and KG Chemical, took over 40 million new shares issued through a third-party allocation, which are valued at 210 billion won ($173.2 million).
State-run Korea Development Bank, formerly the largest shareholder of Dongbu Steel, holds a 13.28 percent stake as a result of the new share issuance. Prior to the news, KDB owned a 39.17 percent stake.
KG Group Chairman Kwak Jae-sun speaks at an inaugural ceremony as he was appointed chairman of KG Dongbu Steel on Sept. 2.
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On Aug. 30, Dongbu Steel issued 72 million shares and raised 360 billion won from the KG-led consortium. In the meantime, it issued 24.2 million shares to fetch 605 billion won from KDB-led creditors.
This came after the KG-led consortium, comprising KG and Cactus Private Equity, was picked as the preferred bidder for the Dongbu Steel acquisition in April. Dongbu decided in a June board meeting to raise capital through the issuance of new stock.
By Son Ji-hyoung (firstname.lastname@example.org)