On September 22, POSCO China held a signing ceremony inaugurating the POSCO Umbrella Facility, a new organization that will stabilize how operating funds are raised for POSCO affiliates in China.
The POSCO Umbrella Facility is part of POSCO’s initiative to build an “integrated group fund management system.”* POSCO affiliates that are a part of this system will be able to borrow money under the same conditions and at the same interest rates as the rest of the group without the need to negotiate with banks individually. The 10 integrated processing subsidiaries in China attended the signing ceremony.
POSCO China hosted the POSCO Umbrella Facility signing ceremony. Clockwise, from the left back row: Dongwook Han, CEO of BNPP Korea; Seonghee Han, CEO of POSCO China; Wonhee Kim, leader of the Fund Group; Gicheon Eom, head of the integrated processing subsidiary; Yongsam Song, head of the Management Strategy HQ at POSCO China; and, Lawrence Mak, CEO of BNPP China.
POSCO affiliates in China now have three methods in place for funding their operations – the new Umbrella Facility, plus China Cash Management (CCM) and Over Draft (O/D) – allowing them to raise up to US$800 million worth of RMB. Because POSCO China, as the group’s representative subsidiary, is now in charge of raising funds, individual subsidiaries are freed from the need to do so themselves. As a result, individual subsidiaries can concentrate their energy on their business performance.
Also planning on participating in the POSCO Umbrella Facility in the future are the POSCO production subsidiaries in China: Zhangjiagang Pohang Stainless Steel, Qingdao Pohang Stainless Steel and Guangdong CGL. POSCO is planning to solidify the POSCO-style Treasury Center in China by implementing the POSCO Umbrella Facility with five or six banks in addition to BNP Paribas.
* Integrated group fund management system is in which the headquarters takes charge of raising long-term financing, POSCO Asia (POA) raises US dollars, and the representative subsidiaries are in charge of raising funds in local currencies.