[Edaily Marketin Reporter LEE GEON-EOM ] KCC Corporation(002380)is proceeding with a capital increase for its U.S. subsidiary, MOM Holding Company (hereinafter “MOM”). The funds raised are expected to be used for facility investments at Momentive Performance Materials (hereinafter “Momentive”), a silicon manufacturer under MOM. Unlike its previous focus on raising funds to repay debt, this move is seen as an effort to enhance the company’s actual business competitiveness.

According to an E-Daily report and a securities filing on the 23rd, KCC Corporation held a board meeting last May and approved a capital increase for MOM. MOM plans to invest the funds raised through this capital increase in facilities to strengthen the production competitiveness of its silicone business. The specific scale of the capital increase has not been confirmed. MOM is a special purpose company (SPC) established by KCC Corporation in 2019 to acquire Momentive, a U.S.-based silicone manufacturer.

What makes KCC Corporation’s latest capital increase noteworthy is that it is fundamentally different in nature from its previous financial support. Previous capital injections into MOM Holdings were focused exclusively on repaying debt to shore up MOM’s financial structure, which had rapidly deteriorated due to Momentive’s persistent losses.

Since its acquisition by KCC Corporation in 2019, Momentive has continued to struggle, posting astronomical losses. Looking just at MOM’s losses over the past three years—305.9 billion won in 2023, 218.8 billion won in 2024, and 556.5 billion won in 2025—the total amounts to 1.0812 trillion won. It also posted a net loss of 20 billion won in the first quarter of this year.

As a result, KCC Corporation has been providing massive capital injections to MOM. Following the repurchase of financial investor (FI) SJL Partners’ stake for approximately 405.9 billion won in 2024, KCC Corporation participated in a 557.8 billion won rights offering in December of the same year.

In July of last year, it raised substantial funds by issuing exchangeable bonds (EBs) using HD KOREA SHIPBUILDING & OFFSHORE ENGINEERING shares as collateral. KCC Corporation used these funds to participate in MOM’s rights offering, injecting 1.0186 trillion won into the company.

The market views KCC Corporation’s move to provide funding for facility investments as a strategic shift resulting from its financial stabilization. Analysts suggest that, having largely secured its financial position by repaying large-scale debt, the company has now embarked on a full-scale effort to enhance its competitiveness. The prevailing view is that KCC Corporation, having put out the immediate fire, has completely shifted the focus of its future capital allocation toward strengthening production competitiveness.

In fact, MOM has succeeded in partially improving its financial structure thanks to KCC Corporation’s capital injection. Total debt, which stood at 3.6778 trillion won in 2024, decreased by more than 1 trillion won to 2.6177 trillion won in 2025. Total equity more than doubled during the same period, rising from 738.1 billion won to 1.5336 trillion won.

Given this situation, observers predict that KCC Corporation, having alleviated its financial risks, will further accelerate its restructuring efforts centered on specialty silicones. With the company now free from the burden of debt repayment and moving full steam ahead with expanding production facilities, analysts expect KCC Corporation’s silicone business to regain profitability and enhance its global competitiveness.

Currently, the global silicon industry is experiencing a severe deterioration in profitability due to oversupply originating in China. To overcome this, KCC Corporation is strengthening its business portfolio by focusing on specialty silicones used in cutting-edge industries such as electric vehicles, semiconductors, and healthcare.

Regarding this, a KCC Corporation official explained, “This rights offering is planned to fund facility investments,” adding, “It is a fundraising effort aimed at enhancing the competitiveness of the silicon business, not at repaying debt.”

Meanwhile, in 2019, KCC Corporation invested a total of $3 billion (approximately 3.55 trillion Hanwha won) to acquire a 45.49% stake in Momentive. At the time, the transaction was recorded as the third-largest overseas merger and acquisition (M&A) in the history of South Korean companies, following those by SamsungElectronics ($8 billion, Harman) and DOOSAN Infracore ($4.9 billion, Doosan Bobcat).