Competition for control of Tong Yang gets fierce

By Kim Yoon-mi

The race for the control of Tong Yang is heating up, with its two largest shareholders competitively raising their stakes in the manufacturer of ready-mix concrete and other construction materials.
As of Tuesday, Pine Tree Investment and Management was Tong Yang’s largest shareholder, retaking the seat from rival Eugene Group less than a week after it was pushed by Eugene to the No. 2 spot.
Tong Yang said in a regulatory filing Tuesday that Pine Tree, a Seoul-based asset manager specializing in nonperforming loans, upped its stake to 10.03 percent through open-market purchases. That is bigger than a combined 10.01 percent stake held by Eugene Corp. and Eugene Investment & Securities, under the Eugene Group.
The filing stated the purpose of Pine Tree’s share purchase as “management participation.”
On the same day, Eugene Corp.’s CEO Jeong Jin-hak said Eugene Group will increase its stake in Tong Yang up to 25 percent to enlarge its market share in the ready-mix concrete industry and enhance competitiveness.
“We will increase our stake (in Tong Yang), which is about 10 percent now, to 25 percent. With such amount of stake, we expect to be able to secure stable management control,” Jeong said in a press conference in Seoul.
Jeong also said Eugene was not pursuing the takeover of Tong Yang for short-term profits, but it hopes to gain a bigger market share in the heavily fragmented ready-mix concrete sector. Eugene Corp. is the industry’s largest, but its share of the market is meager at just over 3 percent.
Sampyo, another ready-mix concrete-maker, is the third largest shareholder of Tong Yang at 3.19 percent.
Tong Yang graduated from a 28-month court receivership earlier this year. It sits on cash of about 500 billion won after it sold assets to repay debt, including a controlling stake in affiliate Tong Yang Cement.
The big day in the shareholders’ battle for control of Tong Yang is March 30, when it holds its general shareholders meeting.
(yoonmi@heraldcorp.com)