Hyundai Motor Group’s IT services unit plans to go public on South Korea’s main bourse this week, which is expected to turn the odds further in favor of heir apparent Chung Eui-sun, according to analysts Monday.
Hyundai AutoEver won approval for an initial public offering on the Kospi bourse earlier this year with the price per share being set at 48,000 won ($42.28). It aims to raise around 168.4 billion won through the listing scheduled for Friday.
The IPO is expected to play a key role in cementing Executive Vice Chairman Chung’s leadership within the group, by allowing him to procure enough capital to purchase more stake in Hyundai Mobis, the firm’s auto parts manufacturing unit. Industry watchers say it is crucial for the ownership family to increase its 6.9 percent stake in Mobis to maintain control.
Hyundai Motor`s Executive Vice Chairman Chung Eui-sun (Yonhap)
Chung currently owns a 19.5-percent stake in Hyundai AutoEver.
“The realistic scenario for Hyundai’s ownership structure is for Chung to purchase more stake in Hyundai Mobis and this is expected to cost him 3.5 trillion won,” Lee Jae-il, an analyst at Eugene Investment & Securities said, while mentioning that the Hyundai scion now holds stake worth about 2.9 trillion won.
At last week’s Hyundai Motor’s annual general shareholders meeting, Chung was appointed to the board of directors, taking additional steps in solidifying his position. He is now an executive director of Hyundai Motor and representative director of Hyundai Mobis.
The results of the meeting signaled a victory for Hyundai in its battle with US hedge fund Elliott on setting dividend payments and appointing outside directors instead of Chung.
Established in 2000, Hyundai AutoEver specializes in software development and systems integration. It has provided IT-related services for the entire group.
By Jung Min-kyung (mkjung@heraldcorp.com)
