Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>The 5% voting gap between Choi and MBK leaves NPS and sideline minority players as key swing factors, with NPS’s stake potentially closing the gap for Choi.</li>
<li>If NPS sold half its stake in the tenders, it's down to 4%, not enough to close the gap, likely giving MBK the win and triggering a post-meeting price drop.</li>
<li>The key to our outright short is NPS’s January 10 disclosure, with market chatter suggesting NPS has likely sold about half its holdings in the two tenders.</li>
</ul>


The 5% voting gap between Choi and MBK leaves NPS and sideline minority players as key swing factors, with NPS’s stake potentially closing the gap for Choi.
If NPS sold half its stake in the tenders, it's down to 4%, not enough to close the gap, likely giving MBK the win and triggering a post-meeting price drop.
The key to our outright short is NPS’s January 10 disclosure, with market chatter suggesting NPS has likely sold about half its holdings in the two tenders.


Figuring Out the Right Entry Point to Go Outright Short on Korea Zinc

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>After the market close on 11 November, it was reported that MBK/Young Poong alliance purchased additional 1.36% stake (282,366 shares) in Korea Zinc from the market.</li>
<li>The gap in the voting rights shares between MBK/Young Poong alliance and Korea Zinc/Choi family alliance has widened from about 3% three weeks ago to about 5% today. </li>
<li>We would further caution investors that if more investors perceive MBK/Young Poong as the clear winner, there could be a further downside risk on Korea Zinc's share price. </li>
</ul>


After the market close on 11 November, it was reported that MBK/Young Poong alliance purchased additional 1.36% stake (282,366 shares) in Korea Zinc from the market.
The gap in the voting rights shares between MBK/Young Poong alliance and Korea Zinc/Choi family alliance has widened from about 3% three weeks ago to about 5% today. 
We would further caution investors that if more investors perceive MBK/Young Poong as the clear winner, there could be a further downside risk on Korea Zinc's share price. 


MBK Purchases Additional 1.36% Stake in Korea Zinc

Equity Capital Markets

<ul>
<li>With the FSS moving fast, Korea Zinc still has time to meet its target. The market started panicking this morning as it looks likely Choi will proceed.</li>
<li>An hour ago, word spread that some Korea Zinc board members were breaking with Choi, causing a stock rebound. Choi’s pushing the raise, but the board’s hesitating.</li>
<li>Choi and the board are set for a high-stakes debate this afternoon on the capital raise, aiming for a final decision by early next week.</li>
</ul>


With the FSS moving fast, Korea Zinc still has time to meet its target. The market started panicking this morning as it looks likely Choi will proceed.
An hour ago, word spread that some Korea Zinc board members were breaking with Choi, causing a stock rebound. Choi’s pushing the raise, but the board’s hesitating.
Choi and the board are set for a high-stakes debate this afternoon on the capital raise, aiming for a final decision by early next week.


The Latest Intel on Today’s Korea Zinc Rollercoaster

<ul>
<li>Ham Young-Il (Deputy Director at FSS) stated that there is a high possibility of an unfair trading practice with regards to Korea Zinc's yesterday announcement of a massive capital raise.</li>
<li>If the FSS puts a break on the capital raise, then there is less likely probability of a fierce proxy war between the two sides. </li>
<li>All in all, we expect continued high volatility on Korea Zinc's share price and we remain negative on its share price in the next several weeks. </li>
</ul>


Ham Young-Il (Deputy Director at FSS) stated that there is a high possibility of an unfair trading practice with regards to Korea Zinc's yesterday announcement of a massive capital raise.
If the FSS puts a break on the capital raise, then there is less likely probability of a fierce proxy war between the two sides. 
All in all, we expect continued high volatility on Korea Zinc's share price and we remain negative on its share price in the next several weeks. 


FSS Could Put a Break on the Massive Capital Raise by Korea Zinc This Year

<ul>
<li>Korea Zinc announced a massive rights offering worth 2.5 trillion won. The expected rights offering price is 670,000 won (57% lower than the closing price on 29 October).</li>
<li>The company plans to use 2.3 trillion won in debt repayment and 135 billion won for working capital as well as help to alleviate the risk of delisting. </li>
<li><em><strong>This rights offering symbolizes a display of "Korea Discount" at its worst and likely to put continued negative pressure on Korea Zinc's share price in the coming weeks. </strong></em></li>
</ul>


Korea Zinc announced a massive rights offering worth 2.5 trillion won. The expected rights offering price is 670,000 won (57% lower than the closing price on 29 October).
The company plans to use 2.3 trillion won in debt repayment and 135 billion won for working capital as well as help to alleviate the risk of delisting. 
This rights offering symbolizes a display of "Korea Discount" at its worst and likely to put continued negative pressure on Korea Zinc's share price in the coming weeks. 


Korea Zinc - Rights Offering of 2.5 Trillion Won Is a Display Of "Korea Discount" At Its Worst

South Korea

Korea Zinc Co., Ltd. specializes in non-ferrous metal smelting industry.  The Company manufactures zinc ingots, electrolytic gold, silver, lead, sulfuric acid, and copper.  Korea Zinc provides its products to domestic and overseas markets.

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Korea Zinc (010130 KS)

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