In accordance with Article
527-3
of KCA, this small-scale merger will be approved by the Board of Directors of POSCO and will not be voted at the general meeting of shareholders.
The timeline of merger
may be adjusted.
The merger shall not be effected if shareholders, who own no less than 20 percent of
the total number of issued and outstanding shares of the company, give written notice to the company of their dissents to the merger within two weeks after the public merger announcement. In such case, further discussions with the acquired company
are necessary to proceed.
POSCO will pay POSCO Energy KRW 1,163,692,490,287 on September 2nd, 2019 as a grant for the
split-merger.
Changes in net assets occurred prior to the date of merger will be reflected on the merger
financial statements.
The merger will take place only if the LNG terminal business transfer deal between POSCO
and POSCO Energy signed on April 16th, 2019, is closed.
The merger deal may be halted if any party fails to fulfill obtaining any required
government approval prior to the date of merger.
The merger contract between POSCO and POSCO Energy shall not come into effect if any reason
set forth below occurs prior to the date of merger.
1) If any party is responsible for the cause of repealing the contract, the party shall not break off the
deal unless the other party consents in writing.
A) Written agreement for the withdrawal of the merger deal between the parties is reached before
the date of merger.
B) If
either party breaches the terms and duties of the contract, which may result in adverse effects, and fails to rectify the issues within 30 days after notification in writing.
C) From the date of signing a contract to the date of merger, if any critical adverse effect
occurs or is reasonably expected to occur in financial condition, business performance, or other business situation
D) If a condition precedent ruled under the Article 12 of the contract is not satisfied
2) If POSCO Energys creditors
object to the merger with the total amount of bonds that exceeds KRW 700,000,000,000, POSCO Energy may break off the merger contract effective immediately in writing. In such case, POSCO may not hold POSCO Energy liable despite the terms of the
Section 3-B
below.
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