Hyundai Motor denies transition into holding company
[THE INVESTOR] Hyundai Motor, South Korea’s leading automotive company, on May 19 officially denied a local news report that said it was planning to convert into a holding company next week.
“The report that Hyundai Motor will convert into a holding company next week is not true,” said the spokesperson of Hyundai Motor Group.
Following Hyundai’s official denial made through regulatory filings, the stock price of Hyundai Motor dropped in the morning, but it rebounded in the afternoon on expectations the company will still make structural changes in the near future. Hyundai closed at 170,000 won ($151), up 3.03 percent from the previous day. It is the first time for the automaker’s stock price to reach the 170,000 won level in about two months.
Local media outlet Maeil Business Newspaper had reported that Hyundai Motor Group would hold a board member meeting next week to introduce a holding company structure.
A day earlier, on May 18, the stock price of Hyundai Motor and its affiliates rose on market expectations for a holding company transition in light of the Moon administration’s drive for chaebol reform, particularly on the country’s big four conglomerates -- Samsung, Hyundai Motor, SK and LG.
On May 17, Moon appointed chaebol reform activist Kim Sang-jo as the new chief of the Fair Trade Commission, signaling his push for reform of the big conglomerates.
“Hyundai Motor is the only group in which the cross-sharing structure is key to management control and succession,” Kim said at a press conference on May 18.
Hyundai Motor Group has a cross-sharing structure in which the auto parts supplier Hyundai Mobis owns 20.8 percent of shares of Hyundai Motor. Hyundai Motor has a 33.8 percent stake in its sister affiliate Kia Motors, which holds 16.9 percent of Hyundai Mobis.
“It is projected that Hyundai Motor Group will speed up restructuring the company due to the administration’s chaebol reform,” said Yoon Tae-ho, an analyst of Korea Investment & Securities.
By Kim Bo-gyung/The Korea Herald (email@example.com)