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POSCO pushes for asset sale to improve financial soundness

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

Mar 4, 2015 10:16
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