Hyundai Motor Scion Buys $259 Million Stake From Uncle's Firmby
Chung Eui Sun bought 1.85 million shares in Hyundai Motor
Deal increases his stake in automaker to more than 2 percent
Hyundai Motor Co. Vice Chairman Chung Eui Sun, heir-apparent to South Korea’s largest carmaker, increased his stake in the automaker by buying shares from a struggling shipbuilding group controlled by his uncle.
Chung on Tuesday bought 1.85 million shares, or a 0.84 percent of Hyundai Motor, for 300 billion won ($259 million) from Hyundai Samho Heavy Industries Co., according to a regulatory filing. The son of the chairman had a 1.44 percent stake in the group’s crown jewel before the purchase.
The purchase helps solidify Chung’s control over South Korea’s largest auto group, while also helping his family. Hyundai Samho Heavy is 95 percent owned by unprofitable Hyundai Heavy Industries Co., which is controlled by Chung’s uncle.
“Chung’s purchase of Hyundai Motor’s shares signals that the group’s succession process has fully begun,” said Park Ju Gun, president of corporate watchdog CEOSCORE in Seoul. “The increased holdings will help Chung lay down the foundation to take full control.”
Hyundai Samho Heavy sold the stake to improve its finances, the company said in a separate regulatory filing. Chung bought the automaker’s stock from the shipbuilder to help protect value for Hyundai Motor shareholders and ensure the stability of the business, Hyundai Motor said in an e-mail.
Hyundai Motor shares fell 1.5 percent to 162,500 won at the close in Seoul trading before the announcement. Hyundai Heavy rose 0.1 percent, while the benchmark Kospi declined 1.4 percent.
Chung, 45, also bought some shares in Hyundai Motor from Hyundai Heavy in September.