Korea Zinc exchanges treasury shares with LG Chem, Hanwha Corp.

Korea Zinc Co. will exchange part of its treasury shares with those of LG Chem Ltd. and Hanwha Corp. in a move seen to strengthen the secondary battery and hydrogen alliance among the corporate trio.

Investment of 370 billion won ($280 million) will be raised through the sale of such shares to Morgan Stanley, the world’s second-largest commodity trading company Trafigura and Korea Investment & Securities.

Korea Zinc, a leading smelter of non-ferrous metals, on Wednesday said it will swap or sell 6.02% worth of treasury stock. The first exchange will be 1.97% (391,547 shares) for LG Chem's 0.47% (367,529) in a block deal after trading hours, with each stake worth 257.6 billion won. Korea Zinc will also exchange a stake of 1.2% (238,358 shares) worth 156.8 billion won with Hanwha's 7.3% (5.4 million).

Korea Zinc will dispose of its remaining 4.35% in treasury stocks to Trafigura for 202.5 billion won, to Korea Investment & Securities for 104.5 billion won and to Morgan Stanley for 65.3 billion won. This swap and sale will form strategic partnerships in the secondary battery sector and generate investment funds.

Korea Zinc will also accelerate green hydrogen battery operations with Hanwha Group, LG Chem and Trafigura.

Along with their swap, Korea Zinc and LG Chem signed a memorandum of understanding on comprehensive business cooperation such as searching for raw materials to respond to the Inflation Reduction Act of the US.

LG Chem in the US state of Tennessee is also building what will be America's largest factory for cathode material plants with a capacity of 120,000 tons, and is in a joint venture with Korea Zinc for constructing a battery precursor plant in Ulsan, the company is considering more than doubling the facility's output capacity from 20,000 tons to 50,000 tons.

Write to Ik-Hwan Kim at lovepen@hankyung.com