Hanwha Corp., the holding company of Hanwha Group, denied speculation, Friday, that the country's No. 7 conglomerate may back Korea Zinc Chairman Choi Yoon-beom amid a fierce battle over Korea Zinc's management rights against a coalition of MBK Partners and the smelter's largest shareholder, Young Poong.

The headquarters of Hanwha Group / Courtesy of Hanwha Group

"It is totally unfounded, and Hanwha Group has no investment plans whatsoever concerning Korea Zinc," Hanwha Corp. told The Korea Times.

Its comment came amid speculation that Hanwha Energy may serve as a white knight for Choi in the middle of a tense battle for management control of the world's largest refined zinc producer.

Korea Zinc and Young Poong had maintained a partnership for decades, but have been at odds over a management dispute since 2022.

Under the circumstances, Young Poong has teamed up with MBK Partners, a private equity firm, for a management buyout of Korea Zinc.

Young Poong holds a 33.1 percent stake in Korea Zinc, whereas the Choi family and friendly investors hold a combined 33.99 percent stake.

MBK Partners made a public offer in a bid to secure up to a 14.61 percent stake in the company with a budget of 2 trillion won ($1.5 billion). The offer price per share is 750,000 won. The offer will be closed on Oct. 4.

Some industry sources speculated that Korea Zinc is poised to lend 400 billion won it received by issuing commercial papers to Hanwha Energy, so that the energy subsidiary can come to its rescue by engaging in a counter-tender purchase, investing the 400 billion won in a special-purpose corporation aimed at fending off the threat to Korea Zinc's management rights.

This scenario, however, drew skepticism as it can incur a loss of hundreds of billions of won to the energy company when Korea Zinc's stock price plunges after completion of the public offer, leading to a controversy over breach of duty by the board.