[Edaily Marketin Reporter KIM YEON-SEO ] The corporate bond market, which had been on hiatus during the Chuseok holiday, is reopening. KoreaZinc(010130), which is embroiled in an ongoing management dispute, is seeking to raise up to 300 billion won in the corporate bond market. GS Entec, backed by a principal and interest payment guarantee from GS Global Corp.(001250), is also conducting a bookbuilding process.

According to the investment banking (IB) industry on the 26th, three companies— SK(034730)(AA+), GS Entec (A0), and KoreaZinc (AA0)—will conduct bookbuilding among institutional investors next week (September 28–October 2) to issue public corporate bonds.

SK will begin its bookbuilding on the 29th with the goal of issuing corporate bonds totaling 150 billion won. The issuance is structured by tranche (maturity) as 100 billion won in 3-year bonds and 50 billion won in 5-year bonds. Depending on the results of the bookbuilding, the company plans to increase the issuance amount to a maximum of 250 billion won. KB Securities and SKSecurities are serving as lead underwriters. Following the bookbuilding on the 29th, the bonds are scheduled to be issued on the 7th of next month.

GS Entec is issuing corporate bonds backed by a principal and interest payment guarantee from GS Global Corp. The total issuance size is 60 billion won, consisting of a 2-year bond worth 25 billion won and a 3-year bond worth 35 billion won; there are no plans for a separate increase in the issuance amount. KB Securities, Korea Investment & Securities, MIRAE ASSET SECURITIES, DaishinSecurities, and Shinhan Investment Securities are participating as lead underwriters. The bookbuilding process will take place on the 29th, with the issuance scheduled for the 7th of next month.

KoreaZinc, which holds an “AA0” credit rating, will conduct a bookbuilding process on the 1st of next month, targeting 150 billion won in 5-year bonds. If there is sufficient demand from institutional investors, the company plans to increase the issuance amount to a maximum of 300 billion won. KB Securities and Hana Securities are serving as lead underwriters, and the scheduled issuance date is the 13th of next month.

As KoreaZinc is currently embroiled in a management control dispute with MBK Partners and Youngpoong, attention is focused on the results of this corporate bond bookbuilding. Korea Ratings assessed that continuous monitoring is necessary regarding the impact the management control dispute may have on KoreaZinc’s business and financial structure.

The management control dispute at KoreaZinc intensified in September 2024 when MBK Partners and Youngpoong launched a tender offer for KoreaZinc shares through the special purpose company (SPC) Korea Corporate Investment Holdings. In October of the same year, KoreaZinc’s management responded by conducting a tender offer for its own shares. During this process, a total of 2.1 trillion won was spent on acquiring treasury shares, significantly increasing the company’s financial burden.

Legal battles are also continuing. On June 27 of this year, Youngpoong won the first-instance ruling in a lawsuit it filed against KoreaZinc seeking to invalidate a new share issuance. The lawsuit centers on a 527.2 billion won third-party private placement that KoreaZinc conducted in September 2023 with HMG Global. As KoreaZinc has appealed the first-instance ruling, the legal battle with MBK Partners and Youngpoong appears to be dragging on.

Kim Kyu-wan, a senior analyst at Korea Ratings, stated, “Depending on the progress of the management control dispute and legal battles, there could be changes in decision-making regarding new business investments and shareholder return policies, as well as in the company’s financial structure. We plan to monitor the situation and the resulting business and financial impacts on the company.”