POSCO Holdings is set to secure approximately 2.5002 trillion won in investment capital through the strategic divestment of shares in two key subsidiaries, POSCO International and POSCO DX. The board of directors approved the plan on August 7, aiming to address the “holding company discount” and bolster overall enterprise value, according to company disclosures.
The transaction involves reducing the holding company’s stake in both entities to 50 percent. Despite these sales, POSCO Holdings will retain its position as the largest shareholder in both companies, ensuring that management control remains unchanged. The move comes as the group looks to reallocate resources toward its core strategic growth areas.
Details of the Share Divestment
The sale price for these shares was calculated based on the closing price of 55,400 won per share from the day preceding the board’s resolution.
Simultaneously, the company will dispose of 23,385,917 shares of POSCO DX for approximately 481.74989 billion won. This transaction will reduce POSCO Holdings’ stake in POSCO DX from roughly 65.38 percent to 50 percent. For POSCO International, the stake will decrease from 70.71 percent to 50 percent, as reported by Digital Daily.
Implementation of Price Stabilization via PRS
To mitigate the impact of market volatility during this process, POSCO Holdings plans to enter into Total Return Swap (TRS), or more specifically, a three-year Stock Return Swap (PRS) agreement for both sets of shares. A PRS is an over-the-counter derivative product that allows parties to settle profits or losses based on the price fluctuations of the underlying assets.
The base prices for these agreements have been set at 55,400 won per share for POSCO International and 20,600 won per share for POSCO DX, according to Newsis. This structure provides a mechanism for settling the difference between the actual sale price and the reference price at the end of the three-year term. The company noted that if block deals—or off-hours bulk trading—become difficult due to market conditions, it may opt to execute the transfers through off-market transactions instead.
Strategic Objective and Market Impact
The primary driver behind this liquidity event is the group’s desire to optimize its capital structure and enhance corporate value. By consolidating its ownership to 50 percent in these subsidiaries, POSCO Holdings is positioning itself to fund future strategic initiatives while maintaining its foundational influence over the group’s operations. The scheduled date for the completion of these share transfers is September 7.
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