POSCO seeks to attract investors to Roy Hill stake

Thu Nov 22, 2012 8:23pm EST
 

SEOUL (Reuters) - South Korean steelmaker POSCO (005490.KS: Quote) is looking for strategic investors in the $1.45 billion stake it has in Australian's iron ore project, Roy Hill, a spokeswoman said on Friday.

The company is seeking investors for the 2.5 percent stake out of the 12.5 percent it has, said POSCO's Kim Ji-young, as the steelmaker is tightening its belt in response to the prolonged downturn in the steel industry.

POSCO, the world's fourth-biggest steelmaker, has been looking to boost its access to iron ore and coal used to make steel, including taking a 15 percent stake in the $10 billion Roy Hill project early this year.

But the company in April sold a 2.5 percent stake in Roy Hill Holdings to China Steel Corporation (2002.TW: Quote) for 359.9 billion Korean won ($331.54 million), leaving it with a 12.5 percent stake.

The Roy Hill project is led by 70 percent stakeholder Hancock in Australia. POSCO, Japanese trading company Marubeni Corp (8002.T: Quote), South Korea's STX Corp 011810.KS, and Taiwan's China Steel Corp (2002.TW: Quote) are among the other stakeholders.

Shares in POSCO, backed by Warren Buffett's Berkshire Hathaway (BRKa.N: Quote) (BRKb.N: Quote), were up 0.3 percent in a flat broader market .KS11 as of 0051 GMT on Friday. It has fallen nearly 10 percent this month, as brokerages downgraded its earnings outlook for the current quarter.

($1 = 1085.5500 Korean won)

(Reporting by Hyunjoo Jin; Editing by Jeremy Laurence)

 
A logo of POSCO is seen at the company's headquarters in Seoul October 21, 2011. REUTERS/Jo Yong-Hak