Schindler Takes $166 Million Charge on Soured Hyundai Investment

Schindler Holding AG, the Swiss maker of lifts and escalators, will take a charge of 155 million Swiss francs ($166 million) on its stake in Hyundai Elevator Co. due to a slump in the Korean company’s share price.

The impairment will be taken in the second quarter, the Ebikon-based company said in a statement late yesterday. Schindler said Hyundai Elevator’s capital increase of about 97 billion won ($84 million) this month accentuated a decline in the share price, which has dropped 47 percent this year.

The charge is a blow for Schindler, which built up a stake in the Korean company with a view to buying its elevator business. Alfred Schindler, the company’s billionaire chairman, has said that Hyundai Elevator’s management reneged on a provisional agreement in 2004 to sell most of the company. Hyundai has said it has no intention of selling the elevator business. A court challenge by the Swiss company against the capital increase was rejected.

“Everything, from a full takeover to a disposal of the stake, is possible,” Andy Schnyder, an analyst at Bank Vontobel in Zurich said in a note to investors. “The Chief Financial Officer told investors recently that there is no quick solution on the horizon.”

Schindler fell 0.1 percent to 133.40 francs at 10:12 a.m. in Zurich.

The elevator maker’s stake dropped to 30.9 percent from 35 percent as Schindler didn’t buy shares in the capital increase. While being the second-largest shareholder, the company has no seats on Hyundai Elevator’s board, limiting its influence.

Chairman Schindler has said there aren’t many alternatives left for the Korean investment.

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