April 20, 2024

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[THE INVESTOR] Hyundai Life is facing a tougher road ahead as its parent company Hyundai Motor Group is getting ready for a transformation.

Hyundai Mobis, its sister firm which holds a 30.28 percent stake in the insurer, and who was expected to lend a helping hand to the cash-strapped insurer, has decided against participating in a 30 billion won (US$28.1o million) capital increase.

Instead, Taiwan’s Fubon Life will go in for a bigger investment, making it the largest shareholder of Hyundai Life. 

On March 28, Hyundai Motor announced major changes to put Hyundai Mobis smack at the center of the control tower. But to do this, the company has to spin off lucrative divisions of Mobis and hand it to Hyundai Glovis.

At the same time, Hyundai Motor Chairman Chung Mong-koo and Vice Chairman Eui-sun will be buying up all stakes held by Mobis sprawled across the conglomerate.

As of the first half of 2017, Hyundai Life’s accumulated net loss reached 227 billion won. Last year, the insurer’s RBC hit 148 percent, falling below the government recommended 150 percent.

While it’s good to see Fubon taking a bigger share, Chung Tae-young, vice chairman of Hyundai Card, who insisted on acquiring Hyundai Life, may face some flak within Hyundai Motor Group for iffy management choices.

By Lee Ji-yoon (jylee@heraldcorp.com)