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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

Hyundai Mobis to cancel W600b treasury shares

  • PUBLISHED :May 02, 2018 - 16:52
  • UPDATED :May 02, 2018 - 16:52
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[THE INVESTOR] Hyundai Mobis said on May 2 it will spend about 600 billion won (US$558 million) to cancel its treasury shares, in a move to improve shareholder value. 

The auto parts unit of Hyundai Motor Group plans to get rid of 2.04 million shares that it currently has -- which will be converted to 1.61 million shares after an upcoming split merger with logistics affiliate Hyundai Glovis -- by next year. The amount is about 400 billion won at today’s market value. 

Additionally, it plans to buy back and cancel another 187 billion worth of treasury shares in the next three years. 




“As the total number of stocks will decrease following the forthcoming split merger, we decided to use part of the dividends to repurchase and cancel shares to enhance shareholder value,” a company official said in a statement. 

The proposed repurchase plan will take effect from next year and will be reevaluated after three years, the firm added. 

Mobis also plans to give out one-third of the yearly dividends in the mid-year, from next year, to allow extra cash flow. 

Its share cancellation -- the first since 2003 -- came after the auto giant was pressed by US hedge fund Elliott Management to ramp up dividends and cancel its treasury shares. Elliott revealed it owns more than US$1 billion stake in the three key units of the auto group – Mobis, Hyundai Motor and Kia Motors. Its parent Hyundai Motor also announced cancellation of about 960 billion won worth shares last week. 

The auto giant announced its governance overhaul plan, which consists of spinning off module manufacturing and after-sales business of Mobis to merge them with logistics unit Hyundai Glovis. 

Elliott -- with a combined stake of 1.4 percent in the auto giant -- however has dismissed the plan, calling it insufficient. It instead insisted Hyundai to adopt a holding company structure.

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

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