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March 21, 2017

Hyundai Motor share price surges on restructuring rumours

Hyundai Motor's share price has rallied amid talk of restructuring by the parent group.

Hyundai Motor's share price has rallied amid talk of restructuring by the parent group.

Reuters reported that the shares rose over 9% today to their highest value in almost two years on hopes that its parent group controlled by Chairman Chung Mong-koo may be about to reorganise as conglomerates in South Korea come under pressure following a number of high profile corruption scandals.

There is also market speculation that US hedge fund Elliott Management Corp may have bought a share in Hyundai Motor.

Reuters noted that Elliott last year pressured Samsung Electronics Co Ltd to restructure and pay a special dividend. The South Korean tech giant subsequently said it would consider creating a holding company and boost dividends, Reuters said.

Investment bank Goldman Sachs yesterday issued a report suggesting that restructuring at Hyundai Motor would unlock value at the company.

"The company is part of a particularly complex and suboptimal capital and corporate structure, and we see significant value that can be unlocked from restructuring," Goldman Sachs said.

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