POSCO, the nation’s top steelmaker, is accelerating the disposal of nonessential real estate assets as it seeks to tidy up its balance sheet and restructure for a slimmer organization.
The steelmaker on Sunday announced it sold a Lotte Mart building and its 5,920 square meter plot of land in Pohang, North Gyeongsang Province, to Lotte Shopping, the operator of Lotte Duty Free.
The portfolio, worth about 20 billion won, includes idle residential sites nearby and a plot of land where an apartment was demolished.
“Our restructuring efforts and turnaround plans really kicked off in the second quarter. We plan to expand these efforts to overseas assets, focusing on those with low profits,” a POSCO official was quoted as saying.
In February, the company sold 35 percent of its stake in United Spiral Pipe, an American steel pipe manufacturer that was set up in 2007 by POSCO, U.S. Steel, and SeAH Steel. POSCO had injected about $130 million in the U.S. shale oil and gas market, but the pipe manufacturer has been suffering due to a massive drop in oil prices.
POSCO said it is also in the final stage of selling off POSCO Uruguay, a forestation company based in South America jointly established with Eagon Industrial in 2009.
Sales of shares in the group’s construction arm is also expected to help increase POSCO’s cash flow.
POSCO Engineering & Construction is currently in talks to sell a 40 percent stake to Public Investment Fund, a sovereign fund of Saudi Arabia, for about $1 billion.
The process has reportedly been delayed due to the prosecution’s probe into the unit’s slush fund allegations, but industry watchers said it would not be a barrier for the deal.
The company’s efforts to secure additional 1 trillion won in cash, following the 2 trillion won it secured from restructuring processes last year, is also active at home.
POSCO P&S, the group’s marketing subsidiary, is expected to acquire some 40.2 billion won later this month when the sale of its 40.1 percent stake in its subsidiary, New Altec, is completed.
The developments come less than a month after Pos-HiaL, the group’s alumina supplier arm, filed for a court receivership ― the first time in the steelmaker’s 47-year history that one of its units has been put under court supervision.
By Suk Gee-hyun (firstname.lastname@example.org)