OREANDA-NEWS. August 28, 2014. POSCO is restructuring its affiliates as part of its plan to improve its underlying financial structure.

POSCO held an executive board meeting on August 8 at POSCO Center located in Seoul, Korea and resolved to put POSCO P&S in charge of managing its steel distribution and manufacture business groups and endow POSMATE with the responsibility for its B2B service group.

In this regard, POSCO decided to invest 100% of the shares of POSCO AST and 34.2% of the shares of POSCO TMC into POSCO P&S, while investing 32.2% of the shares of eNtoB, which is an MRO purchase agent, into POSMATE.

The reason that POSCO reorganized three POSCO family member companies as affiliates is that when specialized mid-level holding companies like POSCO P&S and POSMATE incorporate similar business groups, they can avoid reduplicating work processes and streamline decision-making to ultimately improve corporate value.

POSCO P&S, POSCO AST and POSCO TMC are distribution and manufacture companies focusing on carbon steel, stainless steel and electrical steel, respectively. POSCO took the decision to streamline its business because, while running specialized companies could be advantageous in terms of marketing and business performance during a boom period, it's a different matter when it comes to bad economic times. It is better to consolidate such companies into one to minimize indirect costs during a depression.

POSMATE, which has the subsidiary eNtoB, is expected to create synergies through integration and systematical management of building rent, maintenance and MRO supply.

Meanwhile, POSCO decided to pay 2000 won per share according to its plan to improve shareholder value by ensuring a stable dividend earning to stockholders, despite the difficult business situation.

POSCO has now announced three strategies to strengthen its competitiveness in the steel market: reorganizing its non-core business, ? improving its financial structure and ? streamlining its management. As the first step, it decided to share part of its share in Gwangyang LNG Terminal while pushing ahead with selling non-core businesses, including POSFINE and POSCO Uruguay.

POSCO will continue to reorganize similar businesses across the group in order to streamline overall business structure, boost financial stability and ultimately improve corporate value.