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.

Topics: hyundai, kia

If you liked the article, share on:

Comments

Recommended

Romanian automotive media publication cars.ro earlier said that the new Ford Fiesta will no longer be offered in the United States. Robert Stiller, Ford’s vehicle program manager for the B-segment,...
by - July 26, 2017
The Nurburgring is the one track that many automakers want to hold a record of, because only the best of the best do. This time, a group of extraordinary passionate...
by - July 25, 2017
Would you like your convertible to be inspired by a yacht? Well, you do not have to imagine it anymore - thanks to the Bentley Continental GT Convertible and Mulliner...
by - July 25, 2017
The 2018 Jaguar E-Pace is the leaping cat’s first venture into the compact SUV segment, and sure enough, it didn’t take long before an artist rendered a wilder version of...
by - July 25, 2017
Good news for Audi EU5 and EU6 diesel car owners in Europe. They can now update their cars to fit six-cylinder or eight-cylinder TDI engines through a retrofit program, and...
by - July 25, 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