POSCO tries to exit Myanmar military-backed enterprise

South Korean steel giant POSCO has begun to consider how it could close a joint venture with a military-controlled firm in Myanmar following a coup there in February.

As Myanmar's ruling circles continue their deadly crackdown on protests, hundreds of people have been killed, people said the Korean parent company's POSCO C&C is considering either selling its 70% stake in the venture to Myanmar Economic Holdings Ltd (MEHL) or buying it out. shares. partner's share. It was not immediately clear how much a 30% stake might cost.

Internal discussions are taking place against the backdrop of growing attention from shareholders and human rights activists to international companies still maintaining partnerships in Myanmar. Firms of Australia's Woodside Petroleum and Japanese beverage giant Kirin Holdings are among those who have already shut down.

MEHL is one of the Myanmar military formations that have recently come under US and UK sanctions. POSCO C&C has repeatedly stated that it has not paid MEHL dividends since the Rohingya crisis in 2017 drew international criticism against the Myanmar military.

But those familiar with the matter say POSCO fears a sudden exit from the steel sector because it could potentially jeopardize hundreds of millions of dollars in more lucrative gas projects jointly with another Myanmar state-owned firm, a subsidiary of Posco International. “We do not want to do business as we are now, and we are considering restructuring our operations in Myanmar,” said one of two sources familiar with the discussions. People declined to give their names, citing internal company policies.

"This does not mean that we are in a rush to make any decision, but there are potentially two options, including the sale of our share or the buyout of their share (MEHL)."

POSCO C&C has previously stated that its business will not be affected by the sanctions and that it will only take action if it finds that MEHL is directly involved in the coup.