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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

It falls short: Elliott on Hyundai’s W1tr share buyback

  • PUBLISHED :April 30, 2018 - 16:23
  • UPDATED :April 30, 2018 - 16:24
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[THE INVESTOR] US activist fund Elliott Management on April 30 said Hyundai Motor’s latest plan to cancel 960 billion won (US$899 million) worth of treasury shares “falls short” of shareholders’ demands.

“While this is a positive development, it falls well short of what shareholders require,” a spokesperson of Elliott said in a statement. “We call for Hyundai Motor Group to adopt a more efficient holding company structure and to announce actionable targets for balance sheet optimization, improved shareholder returns, and board structures that ensure best-in-class corporate governance across the group.”




Related:
Hyundai, rethink the holding company: Elliott
FTC chief calls Elliott's demands 'illegal'


The New York-based hedge fund’s remarks came after the auto giant announced a plan to write down 560 billion won of existing treasury shares by July 27, and then buy back and cancel another 400 billion worth of stock. In its first share cancellation since 2004, Hyundai Motor said the move is to enhance its shareholder value. 

Elliott, which revealed it holds more than US$1 billion stake in the three key units of the auto group, has been pressing Hyundai to modify its governance overhaul plan, calling it “insufficient.” On persistent calls from the government to streamline its complex ownership structure, Hyundai said it will spin off module manufacturing and after-sales business of its parts-making affiliate Hyundai Mobis to merge them with logistics unit Hyundai Glovis. 

But Elliott, which has a stake of about 1.4 percent in the auto group, dismissed the original plan and insisted Hyundai to adopt a holding company structure.

By Ahn Sung-mi (sahn@heraldcorp.com)

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