Hyundai Motor Group Chaebol Reform

As a follow up to news on Hyundai Motor Group chaebol reform, we are seeing some interesting developments.  First Samsung is one of the few Groups yet to reform their shareholder structure.  That said, I feel they will adopt one similar to Hyundai’s recent plan– a hybrid from the traditional Korean Holding Corp. model.

Hyundai Motor Group Chaebol reform

For starters and some clarity regarding the spin-off and merger within the Hyundai Motor Group Chaebol reform, Hyundai MOBIS, the new de facto holding company still plans to further beef up its core auto parts business.

That said, operations for both domestic Korea modular and A/S parts will move over to GLOVIS as announced—overseas operations will remain under MOBIS.

In particular, MOBIS as the Group’s nerve center will focus more on R&D, and investing in future growth drivers like autonomous vehicles and connected cars.

Next… and getting lots of media coverage and in my opinion nothing that radical.

On Wednesday, Elliott Advisors, a hedge fund sponsor subsidiary of the U.S. fund, called on Hyundai Motor Group to step up its efforts to overhaul its governance structure after announcing it had acquired more than US$1 billion (1.05 trillion won) worth of stocks in three key affiliates of the Korean automotive group.

“While this step is encouraging, more needs to be done to benefit the companies and stakeholders,” Elliott said in a statement.

The hedge fund sponsor also called for a detailed roadmap to further enhance the Korean auto giant’s corporate governance, optimize balance sheets, and enhance capital returns at Hyundai affiliates.

Elliott Advisors said in the statement it looks forward to engaging with management and other shareholders directly on these issues and offering recommendations regarding the proposed plan.

In response, Hyundai said it will make continued efforts to enhance shareholder value and the worth of its affiliates while focusing on better communicating with shareholders.

I’ve also seen HMC sources note they plan to meet with Elliot teams during an upcoming investor event.

Again foreign investment in Korean publically held companies is nothing new.

For example, HMC’s total foreign ownership is about 46% of the Common Stock. Kia is at about 38%.

Elliott Advisors is estimated to own only a combined 1.4 percent stake in  Hyundai Motor, Kia Motors and Hyundai MOBIS.

One more thing…

Did you have an opportunity to review my detailed 5 Page Report on Hyundai Motor Group Chaebol reform…. If not I please contact me…  as has been very well received.

I’m also available to comment and answer questions as always…

DS

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