Lee Tae-sung and Lee Joo-sung
SeAH Steel Corp., South Korea’s leading steep pipe manufacturer, is set to become a holding company by demerging itself into separate entities for investment business and steel manufacturing, a move to bring efficiency to managing subsidiaries and ensure more responsibility and independence in management and faster decision-making.
The company said Monday its board approved the plan to split its structure into SeAH Steel Holding Company, which would be in charge of investment activities, and SeAH Steel, which would handle its mainstay steel business. Shareholders would receive shares in the newly-formed SeAH Steel proportionate to their current ownership.
SeAH Steel plans to hold a shareholder meeting on July 27 to finalize the plan and aims to complete the demerger on September 1.
The company said the conversion into a holding structure is part of efforts to better manage its fleet of subsidiaries, which have grown over the years from the formation of new entities and series of mergers and acquisitions.
Forming a holding company would also allow the steel maker to fine-tune its global strategy in the face of market uncertainty from growing trade pressure from the U.S. and to speed up investment in overseas subsidiaries.
A company official said the move will also give more power to the next-generation leadership, leading to more stable and independent business decision-making. The steelmaker is led by executive directors Lee Tae-sung and Lee Joo-sung, who are grandsons of SeAH founder Lee Jong-deok.
SeAH Steel is the country’s fourth largest steelmaker in terms of revenue after Posco, Hyundai Steel Co. and Dongkuk Steel Mill Co. It runs 12 operations overseas, including in Japan, Vietnam and the United States.
Shares of SeAH Steel closed Tuesday up 0.27 percent at 75,200 won ($70.50).
By Woo Je-yoon and Kim Hyo-jin
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