85446
Hyundai Motor to Cancel $890 Million in Shares
Hyundai Motor to Cancel $890 Million in Shares

Hyundai Motor to Cancel $890 Million in Shares

Hyundai Motor to Cancel $890 Million in Shares

Hyundai Motor said it will cancel $890 million worth of treasury shares, its first stock cancellation in 14 years—a plan that comes amid heavy shareholder pressure to improve returns, restructure and bounce back from dismal earnings.
US activist hedge fund Elliott Management ramped up pressure on the South Korean automaker this week, calling for a holding company structure, a share cancellation as well as the addition of three independent board members.
“Hyundai Motor seems to be trying to reach a compromise with Elliott by accepting part of its demands,” said Kim Jin-woo, an analyst at Korea Investment and Securities, Business Line reported.
Hyundai said in a statement it plans to cancel 560 billion won ($525 million) of existing treasury shares by July 27, and will buy back and cancel another 400 billion won ($375 million) worth of stock.
“Hyundai Motor has and will continue to focus on improving shareholder value. Today’s announcement is part of a long consideration process and displays our efforts to honor this commitment,” the company said in a statement.

 Bleak Sales
The announcement came on the heels of quarterly profit halving to its lowest level in nearly six years, with the automaker battered by bleak US and China sales. The wider Hyundai group has taken some steps to improve corporate governance and streamline its complex ownership structure.
Hyundai Mobis Co Ltd, which will become the group’s de facto holding firm, plans to spin off its module and after-service parts businesses and merge them with logistics affiliate Hyundai Glovis.
“The share cancellation plan will help placate Elliott and other investors, and raise the chance of the plan getting shareholder approval,” said Ko Tae-bong, an analyst at Hi Investment and Securities.
While welcomed by other investors, pressure from Elliott has drawn criticism from South Korea’s anti-trust watchdog which said this week its proposal for the group to adopt a holding company structure was “inappropriate” and, if implemented, would be in violation of anti-trust law.
Elliott said in a statement on Friday it expected to have dialogue with the anti-trust watchdog over Hyundai Motor Group’s restructuring plan. It did not comment on the share cancellation plan.

Short URL : https://goo.gl/5G7oXV
  1. https://goo.gl/Gq3tX9
  • https://goo.gl/kmKci9
  • https://goo.gl/Xjr9e8
  • https://goo.gl/hrzvZZ
  • https://goo.gl/9AT5rX

You can also read ...

IMF Pledges Continued Work With Central Bank of Iran
More than a week after US Treasury Department blacklisted...
The Sartak-Pishta border gate between the Kurdistan Regional...
More Grain Shipments to Iran
For transport and logistics industry experts, spring is always...
Foiling US Sanctions on Iran: The EU Blocking Regulation
The EU has announced its intention to protect European...
The GDPR clarifies and strengthens existing individual privacy rights.
New European privacy regulations that were to go into effect...
Billet Export Prices Increase
Iranian export steel billet prices picked up in the week ended...
Majlis Forex Options Still on Agenda
Chairman of Majlis Economic Commission said on Tuesday a...
Volvo CE Offers €200m Worth of Mining Machinery
Volvo Construction Equipment has offered to provide Iran with...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus