이 기사는 2022년 02월 14일 08시04분 thebell에 표출된 기사입니다

SeAH Besteel has announced plans to boost shareholder returns, a move seen as part of efforts by the South Korean company to coax shareholders to back its proposal to split off its mainstay special steel business.

The company’s board of directors decided on February 10 to pay a dividend of 1,500 won ($1.25) per share for 2021, the largest in its history.

SeAH Besteel, which is a family-owned company, also said the largest shareholder of the company and its specially related persons will receive a dividend of 1,300 won per share.

Additionally, the steelmaker announced a 5 billion won share buyback, two years after it repurchased shares worth 10 billion won in March 2020 to prop up its share price, which plunged due to the Covid-19 pandemic.

These shareholder return plans were announced ahead of the company’s annual general meeting scheduled for March 25, where shareholders will vote on a proposal to convert SeAH Besteel to an intermediary holding company by separating the mainstay special steel business and making it a wholly owned subsidiary of the intermediary holding company.

In November 2021, SeAH Besteel said it would maintain its dividend payout ratio of above 20% by 2023. The company’s recently announced dividend hike represents a payout ratio of 33.6%, much higher than the target level.

The company is apparently conscious of criticism from both inside and outside of the industry that a listed company’s split-off of its business and a subsequent listing hurts shareholder value of the parent company.

South Korea’s major presidential candidates vowed to tighten regulations on such corporate actions. Jeong Eun-bo, chief of the Financial Supervisory Service, also joined them, saying the financial watchdog would start a review of the existing regulations.

Posco, the country’s biggest steelmaker, obtained approval from shareholders in January to shift to a holding company structure by splitting off its steel unit to make it a wholly owned subsidiary of a holding company.

To ease shareholder concerns, Posco added to the new subsidiary’s articles of association provisions that would require approval for its listing from the holding company’s shareholders.

Unlike Posco, which has a dispersed ownership structure, a roughly 62% of SeAH Besteel is owned by SeAH Holdings. This means following what Posco did would be less effective for SeAH Besteel to persuade shareholders.

SeAH Besteel’s split-off proposal is likely to get passed easily at the annual general meeting given 62.65% voting power held by SeAH Holdings and its specially related persons. Minority shareholders hold only 33.02% of the steel company.

However, it is important for SeAH Besteel to get support from minority shareholders, especially considering the company’s operations after the split-off. “We will maintain a high payout ratio and are also considering various ways to increase shareholder value,” an official at SeAH Besteel said. (Reporting by Su-jin Yoo)