Korea press breaks down assets POSCO is likely to sell

Though nothing has been finalized yet.

Alocal press organization in South Korea reported that POSCO is likely to sell its various assets, and it has been observed that significant progress is underway for these.

According to a research note from Nomura, local press EBN reported on 16 July that POSCO is likely to sell: 1) a 49% stake in its LNG terminal located in Kwangyang, for KRW700bn; 2) its FINEX plant No.1 (production capacity: 600,000tpa); and 3) the smelting business owned by subsidiary POSCO M-tech.

Nomura noted, meanwhile, that based on its conversations with POSCO, it is under the impression that these deals are not yet final.

However, the report noted that POSCO is making significant progress.

Here's more from Nomura:

FINEX plant No.1 sale to India’s MESCO Steel has not been finalized. FINEX is registered as one of Korea’s “national technologies”, and thus POSCO requires the government’s sign-off in finalizing such a deal.

Kwangyang LNG terminal sale – again, this has not been finalized. However, the company is looking to sell this if terms and conditions are decent (EBN quoted a price of KRW700bn).

Future disposal plans. POSCO’s priority is not to sell marketable securities (such as Hyundai Heavy, Hana Financials, etc). Their priority is to sell non-core assets owned by subsidiaries (POSCO Energy, POSCO E&C, POSCO Specialty Steel, POSCO M/Chemtech).

On 30 April, Chosun Daily reported that POSCO may look to sell its stakes in United Spiral Pipes, which POSCO had built in a joint venture with Seah Steel and US Steel in the US. We believe an asset like this may be up for sale.

POSCO aims to sell KRW2.0tn worth of assets, we believe. They do not have a very specific timeline, but rather than focusing on a timeline, they are looking to monetize assets at maximum prices.