Hyundai Motor finally had to resort to the stock buyback programs. (Image: Wikimedia common)
SEOUL, Nov. 12 (Korea Bizwire) — Hyundai Motor officially announced that it is going to purchase 2,202,764 (1% in total) shares of common stocks and 652,019 (1%) shares of preferred stocks on November 11.
It was nine years ago when Hyundai Motor purchased its own shares to support its stock price. In 2005 Hyundai had purchased 11,000,000 shares whose value amounted to 6,239 billion won.
The stock prices for Hyundai are varied as the common stock is valued at 166,500 won, whereas the first preferred stock price stays at 125,500 won, the second preferred stock price costs 127,500 won, and the third preferred stock price is 114,500 won. Thus, Hyundai Motor is planning to invest 4,490 billion won in total to buy both common stocks and preferred stocks.
Kia Motors also announced their plan to buy back 4,053,633 shares of common stocks. It costs 54,500 won per share, so Kia expects to spend 2,209 billion won for stock buyback. Both Kia and Hyundai will start to buy their stocks from coming December to February 11 in the following year.
The decision to buy their own shares is to keep the stock prices from falling. The share prices of Hyundai Motor and Kia Motors began to nosedive when Hyundai Motor Group won the bid for land acquisition of the former KEPCO main office site as the group paid 10.5 trillion won which was the three times higher than the assessed value.
After the land deal, the share price of Hyundai Motor plunged more than 20 percent and the share of foreign holdings dropped to 44.37 percent on November 6, the record-low level for the past four months.
In a third-quarter conference call last month, Hyundai Group offered higher dividends and an interim dividend payout. It tried hard to regain investor confidence by announcing last week it would lead the market with innovative technologies by boosting fuel efficiency by 25 percent by 2020.
These plans, however, didn’t work in bringing the investors’ attention back to Hyundai Group, so it finally had to resort to the stock buyback programs.
By Caroline Seo (caroline@koreabizwire.com)
