By selling its non-core assets abroad, POSCO has turned a profit over three times higher than that of the initial investment. By improving its financial structure, POSCO is accelerating the disposal of more of its non-core assets overseas.
POSCO announced on May 21 that it sold its 15.2 percent stake in Sandfire Resources, an Australian mining and exploration company, on May 14. The group disposed a total of 23,750,000 shares at a price of AU$5.43 (US$4.29 or 4,690 won) each. The total amounts to AU$130 million (US$102.8 million or 113.3 billion won).
In 2008, POSCO purchased Sandfire’s shares at the total price of AU$29.1 million (US$23.01 million or 25.4 billion won), which is AU$1.22 (US$0.96 or 1,054 won) each. Through the disposal this time, the company raked in a huge profit worth 88 billion won (US$80.58 million). Its investment earnings rate reached 347 percent.
As the price of resources skyrocketed due to the rapid economic growth of China, POSCO acquired Sandfire shares for investment in manganese development. After that, the value of Sandfire surged, as the company discovered high-priced copper ore as well as manganese. However, POSCO, which does not deal with copper, classified Sandfire as a non-core asset, and had promoted the sales from 2013. Regarding to when to sell it in consideration of copper prices, POSCO recently decided to sell when the price of copper showed a rising trend in Feb.