Hyundai AutoEver submits documents to speed up IPO

Hyundai Motor Group’s IT service unit Hyundai AutoEver submitted a registration statement to the Financial Services Commission Monday in an attempt to speed up its initial public offering (IPO).

The IPO is likely related to the governance restructuring the auto group has been pursuing since last year. It is also seen as an attempt to avoid being caught out by tightening fair trade regulations on internal trading between affiliates.

Hyundai AutoEver is one of the major non-listed affiliates under the auto group along with Hyundai Engineering. Group affiliates and related persons currently hold over 90 percent of its shares. Hyundai Motor is the company’s largest shareholder with 28.96 percent. The group’s Executive Vice Chairman and heir apparent Chung Eui-sun is the second largest shareholder with 19.46 percent.

As the owner family’s share in AutoEver does not exceed 20 percent, it is unregulated for internal trading, but the company has been under the spotlight as the majority of its sales come from business with Hyundai affiliates and Chung holds just less than a 20-percent stake. Diluting the shares held by Chung could put AutoEver on safer ground.

Some analysts project the group may use AutoEver to accelerate governance structure reforms. Last year’s attempt to make auto parts affiliate Hyundai Mobis its de facto holding company fell apart after opposition by activist hedge funds like Elliott Management and the group is looking for other ways to break the cross-shareholding structure between Hyundai Mobis, Hyundai Motor and Kia Motors.

Possible options could be merging AutoEver with Hyundai Glovis to increase the value of the logistics company and trying the failed merger with Hyundai Mobis again. Last year, the auto group tried to spin off Hyundai Mobis’ module and after-sales business, and merge it with Hyundai Glovis. It was a major step toward making the auto parts maker the group’s holding unit.

Elliott, however, said the 0.61:1 merger ratio between Hyundai Mobis and Hyundai Glovis would undervalue Mobis shares and is unfair to its shareholders.

AutoEver said it will publicly offer 3.51 million shares of trading. The offering price per share is projected to be between 40,000 won ($35) and 44,000 won. Its proposed date of public listing is March 28.

After listing, the company’s market capitalization will be around 840 billion won to 924 billion won, the company said. NH Investment and Securities is taking charge of the IPO process.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]