From BigGo Finance · BigGo Finance · · 1m 30s
MBK Zinc Option Terms Delay Exercise
MBK Partners' Korea Zinc call option can't be exercised after two years, with price rising 5% annually.
In brief
MBK Partners' Korea Zinc call option can't be exercised after two years, with price rising 5% annually. MBK Partners' Korea Zinc call option requires longer than two years to exercise, with price increasing 5% annually. Originally reported by BigGo Finance.
Call Option Terms
MBK Partners said its call option agreement with Young Poong on Korea Zinc shares is not structured to be exercised immediately after two years have passed since the end of the tender offer.
Exercise Price Structure
The option cannot be used before the investment is recovered, and the exercise price adds 5% annually to a base price of 700,000 won (approximately $520).
Two-Year Mark Price
Reaching 770,000 won (approximately $580) at the two-year mark and exceeding 1 million won (approximately $750) if held for 10 years.
Downside Protection
MBK argues that Young Poong secured downside protection through a put option on the same pricing terms plus dividends paid before exercise.
Shareholder Derivative Suit
KZ Precision, affiliated with Chairman Choi Yun-beom, has filed a shareholder derivative suit claiming the contract is disadvantageous to the company.
Contract Details
The contract between MBK Partners and Young Poong was signed in September 2024 through Korea Corporate Investment Holdings.
Dividend Impact
Dividends generated before exercise accrue to Young Poong, adding 40,000 won to the two-year exercise payment.
Legal Dispute
KZ Precision filed a shareholder derivative suit claiming the contract is disadvantageous to the company.
The headline
MBK Partners' Korea Zinc call option requires longer than two years to exercise, with price increasing 5% annually.
