Hyundai Motor to buy back 1% of own sharesHyundai Motor will buy back 2.7 million shares - or 1 percent of the total outstanding - in order to boost its stock price.
The automaker announced on Friday that it will repurchase stocks worth 254.7 billion won, including the common and preferred shares. Hyundai Motor will start the buyback plan on Dec. 3 and carry out the operation through Feb. 18, 2019.
“The latest buyback plan is part of our continuous effort to boost shareholder value,” a Hyundai Motor official said in a written statement on Friday. “It is to reassure shareholders concerned with plunging share values of Hyundai Motor that the company is determined to stabilize share prices.”
This is the second time this year that Hyundai Motor has repurchased its shares in an effort to boost its own market price. In April, it bought back 1 percent of its shares and retired stocks worth 940 billion won ($838.3 million). The purchase was in response to complaints from Elliott Management, a U.S. activist hedge fund, about the auto company’s dissatisfying returns.
Early this year, the fund disclosed a $1 billion stake in Hyundai Motor, Kia Motors and parts affiliate Hyundai Mobis and started to issue various demands, including the enhancement of shareholder value and board changes. The move came right after the automaker announced a governance restructuring scheme to resolve its controversial cross-shareholding structure. The plan was called off.
Hyundai Mobis, which in the restructuring was to assume the role of de facto holding company of the Hyundai Motor Group, the second-largest conglomerate in Korea, repurchased treasury stock worth $557 million after Elliott’s announcement.
BY JIN EUN-SOO [firstname.lastname@example.org]