**■ Unregulated Private Equity Fund**
**Borrowed 1.1 trillion when acquiring a 7.82% stake**
**Concerns over national core technology being leaked overseas if the battery business and others are partially sold**
The crisis at the large supermarket chain Homeplus, which has entered court receivership, has put the management capabilities of the major shareholder, MBK Partners, to the test. Concerns are being raised that the issues with MBK’s acquisition of Korea Zinc’s management rights could lead to a repeat of the “Homeplus crisis.” Discussions are surfacing again about the potential “piecemeal sales” of Korea Zinc’s operational assets, the world’s leading non-ferrous metal smelting company, and the possible overseas leakage of national core technologies.
According to industry sources on the 17th, MBK acquired a 7.82% stake in Korea Zinc through a tender offer in September last year, followed by two on-market purchases. About 70% (approximately 1.11 trillion won) of the 1.5 trillion won expended by MBK for Korea Zinc’s shares was borrowed from NH Investment & Securities. This strategy mirrors the leveraged buyouts seen in the Homeplus acquisition. Should MBK proceed to acquire the shares in Korea Zinc held by Young Poong, the debt could rise to several trillion won, substantially increasing their financial burden. Speculation arises that MBK might deploy an “exit” strategy, similar to that seen in the Homeplus affair, by selectively selling off Korea Zinc’s existing non-ferrous metal smelting operations, strategic mineral production business, secondary battery materials business, and renewable energy business.
There’s a resurfaced concern that Korea Zinc’s national core technologies might be sold or shared with countries like China, thereby posing an economic security threat.
Korea Zinc is the only company in the country that produces major strategic minerals (such as antimony, indium, bismuth) that China has restricted from being exported to the U.S., and it plays a key role in the process of building a supply chain. Korea Zinc produces about 3,500 tons of antimony annually, fulfilling all domestic demands, which is a core material for defense and aerospace industries.
Previously, MBK attempted to sell Doosan Machine Tools (DN Solutions), which possesses national core technology, to foreign companies, including those in China. However, the Korean government opposed this, leading to the eventual sale to DTR Automotive, a domestic auto parts company.