Korea Zinc shares plunged over 13% on Tuesday, as its largest shareholder is reportedly opposing plans to create a U.S.-backed joint venture that will see a dilution of its equity stake in the South Korean company.
Shares of the world’s largest zinc smelting company had climbed over 26% on Monday, before paring gains to 5%, as it announced a $7.4 billion mineral smelter project in Tennessee.
The company’s largest shareholder alliance is opposing the move and would seek a court injunction to stop the company from issuing new shares.
The Korea Times reported that the alliance, made up of private equity firm MBK Partners and conglomerate YoongPoong, said the plan was designed for company Chairman Choi Yun-beom to hold on to management control.
Under the deal, a joint venture company will be set up to build the smelter in Tennessee, with the Pentagon having a 40% stake in the JV.
