Inheriting Management
Hyundai Motor Group Chairman Chung Mong-koo and Vice Chairman Chung Eui-seon will sell 13.39 percent (5,022,170 shares) of their Hyundai Glovis shares through a block deal.
This deal is for them to comply with the restriction on conglomerate owners’ shareholding in their subsidiaries stipulated in the Fair Trade Act. Although their shareholding ratio will decrease, more than 1 trillion won will become available in cash for them so that they can purchase other subsidiaries in the future. This is why some experts regard the deal as the chairman’s preparation for handing over the company to his son.
The chairman and vice chairman began to attract institutional investors after the closing of the Jan. 12 session. The price was 264,000 to 277,500 won (US$242 to $254), 7.5 percent to 12.0 percent discounted from the day’s closing price of 300,000 won (US$275). At present, they own 11.51 percent (4.317 million shares) and 31.88 percent (11,954,460 shares) of Hyundai Glovis, respectively. 4.8 percent of the chairman’s shares and 8.59 percent of his son’s shares were put on the market.
The chairman and his son are expected to be able to procure 1.3259 to 1.3937 trillion won (US$1.2158 to $1.2780 billion) through the block deal. After the deal, the number of shares decreased to 2.517 million (6.71 percent) and 8,732 million (23.28 percent) each. According to the current Fair Trade Act, conglomerate owners’ shareholding in their listed and non-listed subsidiaries cannot exceed 30 percent and 20 percent, respectively.
Earlier in 2014, the vice chairman sold his Innocean shares for at least 300 billion won (US$275 million) in cash. This is expected to be spent on acquiring the shares of major subsidiaries such as Hyundai Mobis and Kia Motors.