Hyundai AutoEver to go public

Hyundai AutoEver, an ICT affiliate of Hyundai Motor Group, plans to go public on the Korean stock market, a move seen as a preliminary step to the group’s restructuring. The company said it submitted an application for preliminary screening to the Korea Exchange on Thursday. NH Investment and Securities will oversee the deal.

“In time for the paradigm shift such as the fourth industrial revolution, [the initial public offering (IPO)] is to enhance the company’s competitiveness in digital technology as well as the company’s awareness, in addition to further secure investment for research and development,” the company said.

Hyundai AutoEver was established in 2000 as a B2B company that develops a range of auto software systems related to connected and cloud services. It posted 1.1 trillion won ($971.4 million) in revenue last year with 52.1 billion won in net profit.

In addition to fortifying the company’s competitiveness, the IPO is expected to relieve more than one risk at Hyundai Motor Group once it restarts its governance restructuring scheme. The company’s internal trade with other Hyundai affiliates accounted for more than 80 percent of its revenue last year.

Kim Sang-jo, head of the Fair Trade Commission, has been pushing chaebol to eliminate trade among affiliates.

Domestic fair trade law regulates family members of chaebol from owning more than 20 percent of the group affiliate’s shares. Hyundai Motor Group Executive Vice Chairman Chung Eui-sun slightly missed the spot by owning a 19 percent stake in Hyundai AutoEver, yet the latest push for an IPO is seen as a move to eliminate any possible risk of controversy.

The public listing of the company is also expected to help Chung secure more funds required for the future governance restructuring as it will encompass numerous spinoffs and mergers.

Hyundai Motor Group initially released a restructuring scheme back in March that never got off the ground due to a negative response from the market.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]