POSCO ENERGY Co., Ltd. agreed to acquire Tong Yang Power Inc. from Tong Yang Leisure Co.,Ltd., Tongyang Inc. and TONGYANG Cement & Energy Corporation (KOSDAQ:A038500) for approximately KRW 430 billion in cash on June 5, 2014. POSCO ENERGY was selecting as priority bidder. TONGYANG Cement & Energy Corporation is selling 55.02% stake, Tong Yang Leisure Co.,Ltd. is selling 24.99% stake and Tongyang Inc. is selling 19.99% stake in Tong Yang Power Inc. POSCO ENERGY will acquire approximately 11.8 million shares of Tong Yang Power, representing 100% stake in Tong Yang Power. POSCO ENERGY Co., Ltd. signed a definitive agreement to acquire Tong Yang Power Inc. from Tong Yang Leisure Co.,Ltd., Tongyang Inc. and TONGYANG Cement & Energy Corporation on June 25, 2014. POSCO ENERGY Co., Ltd. paid deposit of KRW 23.72 billion to TONGYANG Cement & Energy Corporation on June 25, 2014.

Tong Yang Power had total assets of KRW 27.5 billion, total liabilities of KRW 6.9 billion, total stockholders' equity of KRW 20.5 billion, and net loss of KRW 29.9 billion for the year 2013. The transaction received court of justice approval. The transaction was resolved by the Board of Directors of POSCO ENERGY Co., Ltd. on June 11, 2014. As of June 18, 2014, the transaction was approved by Board of POSCO (KOSE:A005490). The acquisition is expected to be completed on August 24, 2014. As on August 25, 2014, the transaction is expected to close on August 29, 2014.