POSCO seeks restructuring for $1.9 bn injection in battery materials

POSCO Holdings Inc. aims to raise its corporate value through an ambitious scheme that entails securing 2.6 trillion won ($1.9 billion) through restructuring for its steel and battery materials investment and retiring 2 trillion won worth of treasury stocks by 2026.

The holding firm of South Korean steel giant POSCO Group will sell or liquidate more than 97% of 120 non-core assets and low-profit businesses by 2026, the company said on Friday at its annual Value Day event for institutional investors and analysts.

POSCO Holdings will secure 2.6 trillion won through restructuring and inject the funds into the battery materials business, its new growth engine led by POSCO Future M Co. The company is testing solid-state electrolyte and lithium metal anode and aims to soon commercialize these key materials for advanced rechargeable batteries.

Its sulfide-based solid-state electrolyte is undergoing a verification procedure led by Samsung SDI Co., which plans to produce a sulfide-based all-solid-state battery by 2027, according to industry insiders.

POSCO Future M is also manufacturing prototypes of lithium metal anode materials and testing the samples with a global carmaker. POSCO's battery materials unit is developing a more reliable anode, 600 millimeters wide and with a protective coating.

SALES GOAL ADJUSTED

POSCO has set a goal of 11 trillion won in annual sales of battery materials such as cathode, anode, lithium and nickel, by 2026. The company is set to complete construction of facilities by 2026 to produce 395,000 tons of cathode, 114,000 tons of anode, 96,000 tons of lithium and 48,000 tons of nickel.

The company adjusted its sales goal from last year's plan of 16 trillion won in  annual revenue from battery materials by 2025 amid a prolonged slowdown in global electric vehicle demand.

POSCO will also invest in manufacturing upstream steel products — semi-finished products such as slabs and billets — in India and the US. The company needs to produce them in the US in particular because the country has an import quota on Korean-made steel.

SHARE RETIREMENT

POSCO aims to achieve a 200 trillion won market cap for the group by 2030 from the current 70 trillion won, under the leadership of Chair and CEO Chang In-hwa, who started his three-year term in March.

For the treasury shares it buys back, the holding company will cancel the shares shortly after repurchase except for the stocks it will hold for employees, said POSCO Holdings Chair and CEO Jeong Ki-seop on Friday.  

POSCO Holdings will retire 2 trillion won worth of treasury stocks by 2026 in an effort to achieve the goal and increase shareholder value.

The holding firm plans to first retire 1.9 trillion won worth of the shares — 10% of the treasury stocks it holds. It has already retired 660 billion won worth of the shares, the company said in its regulatory filing on Friday.

In addition, it has bought back 100 billion won worth of stocks and retired them, according to the regulatory filing.

Write to Hyung-Kyu Kim at khk@hankyung.com
Jihyun Kim edited this article.