Hyundai and Kia to buy back a combined $616 million of stock

Article by Christian A., on November 13, 2014

South Korean carmakers Hyundai Motor Co. and Kia Motors Corp. will repurchase a combined KRW670 billion ($616 million) of stock after their pricey acquisition of a property in Seoul prompted a sell-off of shares. Hyundai will buy back 2.2 million common shares and 652,019 preferred shares, while Kia will repurchase 4.05 million common shares, according to separate regulatory filings by the carmakers.

They said that the buybacks will be completed by Feb. 11, 2014 to “stabilize share prices and improve shareholder value.” The disclosure came nearly two months after Hyundai, Kia and Hyundai Mobis Co. won an auction for prime property in Seoul’s central Gangnam district. The companies offered triple the assessed price.

Heo Pil Seok, chief executive of Midas International Asset Management Ltd., remarked that the announcement will help ease worries that Hyundai may cut dividend payout. He added that the move “meaningful” since both companies have taken a step to improve shareholder value.

He noted that the buyback will definitely improve investor sentiment and hike market expectation for a surge in dividend.

In October, on behalf of the consortium, Hyundai said that the three companies won’t issue debt and will use cash to finance the land purchase priced at KRW10.6 trillion – dampening expectations for an increase in dividend payouts.

In a bid to ease those concerns, Hyundai Chief Financial Officer Lee Won Hee and Kia’s then-CFO and now co-chief executive Park Han Woo said last month that the companies are mulling an interim dividend payout.

If you liked the article, share on:

Topics: hyundai, kia

Comments

Recommended

November 17 is considered a very special day for Tesla, as this is the day that they revealed the highly anticipated Tesla Semi. But Elon Musk did not think the...
by - November 17, 2017
More details have emerged about the new sixth generation of the BMW M3 just as the German premium practically announced the end of the current-gen 3 Series with the unveiling...
by - November 17, 2017
All is set for Volkswagen’s plans to enter the electric vehicle game, as prompted by the so-called Dieselgate scandal. In fact, the German carmaker has already made a commitment to...
by - November 17, 2017
As BMW has already revealed, the next generation of the BMW M5 (F90) is a four-wheel drive high-performance sedan with overwhelming power output and torque at its disposal. However, it...
by - November 17, 2017
McLaren unveiled a one-off Gold - on - Black 720S at the 2017 Dubai Motor Show which will be on display throughout the entire stretch of this week’s event. The...
by - November 16, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries